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Can we substitute a domestic tax for non existent international tariffs?

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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 04:54 PM
Original message
Can we substitute a domestic tax for non existent international tariffs?
I respect international trade agreements that restrict the use of tariffs. I believe in free trade and I make no apology for it but I demand that free trade is only free to the extent it is exercised on that delightful myth, the 'level playing field'.

That said I understand why we can not put up tariffs at the border and turn the worthless-junk that floods our industry-starved shores in to expensive-worthless-junk but I consider it nothing but a failure of imagination on the part of our lawmakers that we have not found a way to tax the stuff out of existence at the cash register. Let's face it, Wal Mart is nothing but the marketing and distribution arm of the Chinese Government. It is cheap plastic Chinese shit that is crossing our ports, sailing along our roadways, displayed on shelves given property tax breaks at the local level that has led to displaced industries, unemployment, underemployment, and the return to serfdom in our labor market without much more than local sales taxes having ever been collected on it anywhere.

If we can't put tariffs on it at least lets find a way to tax that imported junk to make its price competitive with better-made and more importantly American-made counterparts. Surely there is a way for GE to make a steam-iron again or RCA to build a television set in this country but it will never happen until the out-of-pocket cost of the items are brought on a par and clever taxes are the only way that is going to happen.
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mrreowwr_kittty Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 05:00 PM
Response to Original message
1. State and local tax subsidies to multi-national corporations need to be stopped!
One of the reason Walmart can charge those "low low prices" is that it collects TIF revenues in many locations. That means that the sales tax you pay on crap from Walmart goes back to Walmart and not the community.
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Warren Stupidity Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 05:07 PM
Response to Original message
2. a 'tariff' and a 'tax that imported junk' are the same thing
but why do believe in unrestricted trade?
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Sen. Walter Sobchak Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 05:10 PM
Response to Original message
3. The simple answer is no
That is explicitly illegal as trade discrimination under the GATS, GATT and TRIPS agreements, the non-simple answer is about 60 to 80 pages long.

Virtually every trade agreement requires that foreign and domestic goods be treated equally once imported.

If the US were to try this the reciprocal trade retaliation would be devastating.
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mrreowwr_kittty Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 06:43 PM
Response to Reply #3
4. Those agreements don't seem to apply to other countries.
There are many that impose tariffs on US goods.
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Sen. Walter Sobchak Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-01-09 07:02 PM
Response to Reply #4
5. It depends on the trade agreement and the goods
Different classes of goods have different tariff rates either under the WTO or an individual trade agreement between the United States and the other country.

In this case the question is can a consumption tax be applied for foreign goods at the point of sale? the answer is no - it is illegal under the WTO and it was the United States that has long demanded that rule to protect US liquor exports.

Tariffs are legal - provided they are compliant with US treaty obligations, the US has tariffs on many classes of goods. But under the WTO and its associated agreements once a good has been imported it must be treated equally.
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unlawflcombatnt Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-02-09 09:03 PM
Response to Reply #3
6. How?
"If the US were to try this the reciprocal trade retaliation would be devastating."

How would it "devastate" us? We sell almost nothing but raw materials to China, which they use to make the imports they sell back to us. They import all of $60 billion from the US, while we import $320 billion from them. If we cut off all trade with China with mutually retaliatory tariffs, we'd come out +$260 billion ahead.

How would retaliatory tariffs hurt us?

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GSPowner Donating Member (89 posts) Send PM | Profile | Ignore Fri Jan-02-09 10:09 PM
Response to Reply #6
7. Inflation would be killer
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David Ricardo Donating Member (53 posts) Send PM | Profile | Ignore Sat Jan-03-09 02:37 AM
Response to Original message
8. Foreign subsidies
like all subsidies are passed on to the consumer. Thus, in theory, in the absence of subsidies, China has a comparative advantage in good X and the US has a comp. ad. in good Y, if China chooses to subsidize Y, then it essentially means that the Chinese government (taxpayers) are paying US consumers to buy their goods. In theory the money saved by the subsidy would just be spent elsewhere (consumption or investment) meaning that GDP shouldn't really change. In the short run there would be a lower quantity demanded of labor in the US for good Y, but presumably the demand for labor would pop up in other sectors (as it did with white-collar tech jobs).

It all comes back to comparative advantages in global trade.
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