Trump planning massive tax/tariff hike

Yahoo News reports:

Donald Trump’s return to the White House could bring about seismic changes to US trade policy, as the Republican frontrunner proposed setting up a universal tariff on imports entering the country.

He also proposed a “matching tax” on certain countries that would be equivalent to high tariffs on US products.

While Trump laid out the idea of a universal tariff months earlier, he appeared to get more specific last week.

“I think when companies come in and they dump their products in the United States, they should pay automatically, let’s say a 10% tax,” he told Fox News on Thursday. “That money would be used to pay off the debt. It’s a massive amount of money.”

He later added, “I do like the 10% for everybody.”

Tariffs are a tax on consumers. They don’t get paid by the foreign companies – they get paid by consumers.

It has also been shown that tariffs do not help local industries. They incentivise them to be inefficient by protecting them from competition.

In NZ the wine industry used to compete on price as tariffs meant no one else could sell cheap wine in NZ. The tariffs went, and the wine industry diversified and now is a major export earner for it.