Serious tariff question

[dbjork6317]

Ok setting aside arguments on whether tariffs are good or bad etc, I’m curious what exactly the tariffs on Canada are trying to get accomplished.

The President says that the tariffs are designed to get the border secured and to stop drugs from coming into the country, and if you take that at its face value then maybe tariffs on Mexico make some sense, but I don’t understand the tariffs on Canada.

What specific actions is the President wanting to see from Canada (and Mexico too) that would lead him to determine that the tariffs can be removed?

The President has talked about tariffs as an effective way to get other countries to do something the US wants them to do, but it’s unclear to me what he’s wanting from Canada, so to me these tariffs feel awfully arbitrary and are creating tensions and a trade war with a country that should be our closest ally and it feels like this will only hurt citizens in both countries.

Looking for serious responses here, please and thank you.

 

[other1]

FWIW, trump put 25% tariffs on imports from Canada and Mexico and only 10% on those from China. Does this mean we can refer to him as Peking Don from here on out??

 

[dbjork6317]

FWIW, trump put 25% tariffs on imports from Canada and Mexico and only 10% on those from China. Does this mean we can refer to him as Peking Don from here on out??

My understanding was the 10% on china was an additional 10% on the already existing tariffs, but I could be wrong.

 

[dpic73]

Ok setting aside arguments on whether tariffs are good or bad etc, I’m curious what exactly the tariffs on Canada are trying to get accomplished.

The President says that the tariffs are designed to get the border secured and to stop drugs from coming into the country, and if you take that at its face value then maybe tariffs on Mexico make some sense, but I don’t understand the tariffs on Canada.

What specific actions is the President wanting to see from Canada (and Mexico too) that would lead him to determine that the tariffs can be removed?

The President has talked about tariffs as an effective way to get other countries to do something the US wants them to do, but it’s unclear to me what he’s wanting from Canada, so to me these tariffs feel awfully arbitrary and are creating tensions and a trade war with a country that should be our closest ally and it feels like this will only hurt citizens in both countries.

Looking for serious responses here, please and thank you.

All the pundits and experts I've heard are totally gobsmacked by the tariffs we're putting on our closest and friendliest ally. There is nothing that makes sense about it but the concensus seems to be that he's angry about them clapping back at his remarks about incorporating them into America. Though taxing our own people is such a weird flex to get revenge for being mocked.

They are now retaliating with their own tariffs and boycotting our products, including targeted boycotts of products from red states only.

One thing it has done is unite the political parties in Canada who have now joined forces to speak as one voice against these unnecessary attempts to harm them.

 

[dpic73]

My understanding was the 10% on china was an additional 10% on the already existing tariffs, but I could be wrong.

That's correct, the 10% is on top of the tariffs already in place.

 

[CUTiger1977]

 

[dpic73]

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This doesn't address his question on why put tariffs on Canada but economists almost universally agree that replacing income taxes with tariffs is impractical.

Kimberly Clausing, economist and Professor of Tax Law and Policy at the UCLA School of Law:

"In general, this is a deeply impractical plan," Clausing, who previously served as Deputy Assistant Secretary for Tax Analysis in the U.S. Department of the Treasury, told Newsweek.

"First, we already have a Customs and Border Protection office...including officials who collect tariffs. Second, it seems like an odd move for an Administration supposedly focused on efficiency (see DOGE) to suggest a redundant government agency as a solution."

Asked whether there was any way the revenue generated from tariffs on Canada, Mexico and China, among others, could make up for the elimination of income tax, Clausing said: "Simply put, no. It wouldn't even be close."

A June report for the Peterson Institute of International Economics, co-authored by Clausing, found that the tax base on incomes vastly outweighed the tax base on traded goods, $3.1 trillion compared to over $20 trillion in 2023, respectively.

Considering this, as well as an anticipated reduction in trade as duties come into effect, Clausing said that "even very high tariffs could only replace a minority of the revenue raised by income taxation, and such high tariffs would cripple the economy."

"Abolishing the IRS makes no sense for a modern country that would like to collect some income tax revenue and have a fair and well-functioning tax system to help fund public services," Clausing told Newsweek when asked about the potential elimination of the agency. "The U.S. is a low tax country, collecting much less revenue as a share of GDP than peer nations."

Could Donald Trump replace the IRS with tariffs? Economists weigh in

Experts believe Trump would struggle to replace tax revenue with income from tariffs, as the president has recently suggested.

www.newsweek.com