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"Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
"War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.
And subsidies are the flip side of the coin, but to stick to tariffs:
For one thing Tariffia won't place a tariff on steel, they aren't stupid, they will tariff only those things they can produce for themselves at a low enough price to still compete in Freetradia's car market while denying Freetradian car makers access to their domestic market.Originally Posted by Madison320
I posted this earlier:
"Suppose Tariffia and Freetradia both want to make cars. Freetradia has all the steel. Tariffia has all the rubber. Since Freetradia has access to cheap steel and rubber it can make cars for 10K. Tariffia has no steel so it has to use carbon fiber and other various expensive or inferior substances. Tariffia can make cars for 100K. If you live in Freetradia you are going to buy the 10K cars manufactured locally, not the 100K cars manufactured in Tariffia. The manufacturer in Tariffia, even though permitted to sell to Freetradia, won't be able to sell any cars there because it costs to much to make them. On top of that Tariffia won't even be able to sell many cars to their own citizens because they're TOO EXPENSIVE!"
In other words Tariffia will only be able to sell cars in Tariffia due to a comparative disadvantage, and Freetradia will only be able to sell cars in Freetradia due to fiat. But the Freetradia company will be able to sell MORE cars because they are more affordable. This example assumes equal populations in Tariffia and Freetradia.
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
If Tariffia only puts tariffs on things it can already produce just as cheap as foreign goods, it's the same as not having tariffs. They'd have no effect because in that case everyone would be buying the local product anyway.
Tariffs are used specifically to make imported goods more expensive. In this case Trump's steel tariffs are going to raise the cost of steel in the US. And that will raise the production costs of US manufacturers.
I didn't say it would only puts tariffs on things it can already produce just as cheap as foreign goods, I said it would only tariff things that it could produce without making the end product non-competitive in the Freetradian market, it would only raise it's costs a little here and there.
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
"Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
"War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.
"And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat
"It is difficult to free fools from the chains they revere." - Voltaire
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
It does make a difference, they get access to both markets (exclusive access to their market) while remaining competitive in Freetradia's market, the Freetradians are locked out of the Tariffian market while loosing market share in their own market, if that isn't enough to put them out of business slowly then Tariffia moves on to subsidizing their producers.
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
No you didn't.
You keep pretending that they must have a ham handed approach when they can use a nuanced one instead.
While we are at it your whole thought experiment ignores the fact that there are more than two countries in the world, Tariffia can negotiate favorable trade agreements with other sources of supply while Freetradia is preyed upon by every other country.
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
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