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Started By
Message
re: Iowa farmers split between voting for Trump, Biden
Posted on 11/1/20 at 11:01 am to cwill
Posted on 11/1/20 at 11:01 am to cwill
The idea that consumers pay all the tariff is based on ECON 101 two country model. If you take ECON 300-400 International Econ you go into more nuance as this board is famous for. With three or more countries things get more complicated.
EXAMPLE 1A: Free Trade (Toasters $12 each from China and$12 each from India)
• USA buys 100 toasters from China
• USA buys 100 toasters from India
• Total Imports 200 toasters: $2400
• Tariff Revenue: none
• Who Pays Tariff? (No tariff – free trade)
EXAMPLE 1B: TARIFF ADDED $5 per toaster on China
• USA buys 0 toasters from China
• USA buys 200 toasters from India
• Total Imports: 200 toasters all from India $2400
• Tariff Revenue: $0
• Who pays Tariff? no one, but China suffers loss in 100 toaster exports to USA.
EXAMPLE 2: When China and India differ in toaster costs.
EXAMPLE 2A: Free Trade (Toasters $10 from China and $12 from India)
• USA buys 200 toasters from China
• USA buys 0 toasters from India
• Total Imports 200 toasters from China, $2000
• Tariff Revenue: $0
EXAMPLE 2B Add $5 Tariff on China, China does not respond).
• China toasters are now $10 + 5 = $15.
• USA buys 200 toasters from India
• Total Cost $1200
• Tariff Revenue: $0
• Result: USA consumes suffer $2 per toaster (not $5) and China loses all toaster sales.
EXAMPLE 2c ($5 Tariff on China, China responds with $4 subsidy on toasters)
• China Toasters are now $10+5-4=$11
• USA buys 200 toasters from China and 0 from India
• Total Imports 200 toasters, $1100
• China taxpayers pay $4 per each toaster going to USA
• Tariff Revenue: $5*200=$1000
• USA Consumers pay $1 and Chinese Taxpayers pay $4 for each $5 going to the USA Treasury.
In that last example toaster "farmers" could be paid $400 in welfare and it would be 'free' in the sense that China taxpayers would be paying it. Only downsides is $100 more being paid by toaster customers at the same time. But from USA public welfare overall perspective: $400>$100 so net benefit of $300 To USA Citizens (consumers and 'farmers' combined).
EXAMPLE 1A: Free Trade (Toasters $12 each from China and$12 each from India)
• USA buys 100 toasters from China
• USA buys 100 toasters from India
• Total Imports 200 toasters: $2400
• Tariff Revenue: none
• Who Pays Tariff? (No tariff – free trade)
EXAMPLE 1B: TARIFF ADDED $5 per toaster on China
• USA buys 0 toasters from China
• USA buys 200 toasters from India
• Total Imports: 200 toasters all from India $2400
• Tariff Revenue: $0
• Who pays Tariff? no one, but China suffers loss in 100 toaster exports to USA.
EXAMPLE 2: When China and India differ in toaster costs.
EXAMPLE 2A: Free Trade (Toasters $10 from China and $12 from India)
• USA buys 200 toasters from China
• USA buys 0 toasters from India
• Total Imports 200 toasters from China, $2000
• Tariff Revenue: $0
EXAMPLE 2B Add $5 Tariff on China, China does not respond).
• China toasters are now $10 + 5 = $15.
• USA buys 200 toasters from India
• Total Cost $1200
• Tariff Revenue: $0
• Result: USA consumes suffer $2 per toaster (not $5) and China loses all toaster sales.
EXAMPLE 2c ($5 Tariff on China, China responds with $4 subsidy on toasters)
• China Toasters are now $10+5-4=$11
• USA buys 200 toasters from China and 0 from India
• Total Imports 200 toasters, $1100
• China taxpayers pay $4 per each toaster going to USA
• Tariff Revenue: $5*200=$1000
• USA Consumers pay $1 and Chinese Taxpayers pay $4 for each $5 going to the USA Treasury.
In that last example toaster "farmers" could be paid $400 in welfare and it would be 'free' in the sense that China taxpayers would be paying it. Only downsides is $100 more being paid by toaster customers at the same time. But from USA public welfare overall perspective: $400>$100 so net benefit of $300 To USA Citizens (consumers and 'farmers' combined).
This post was edited on 11/1/20 at 11:07 am
1
Posted on 11/1/20 at 11:08 am to cwill
quote:
I agree, Trump has doled at massive amounts of farm welfare to those guys since starting the trade war with china. The only possible reason you could have a significant split is they question whether the welfare will keep flowing.
Better them than actual welfare recipients who don’t do shite for it except hold out their hands.
Posted on 11/1/20 at 11:54 am to Homesick Tiger
In California I've seen a lot of Trump signs on farms but not a single one for Biden.
Posted on 11/1/20 at 1:47 pm to Shamwow
quote:
No love for Tuck?
I was thinking Tucker and typed Hannity. My bad.
Mr. Tick-Tock is a patriot but his routine is boring.
Tucker is on a level all to his own.
Posted on 11/1/20 at 2:02 pm to Homesick Tiger
Fans are split on whom to to support in the Superdome.
Posted on 11/1/20 at 2:09 pm to TexasRiddler
quote:
EXAMPLE 2c ($5 Tariff on China, China responds with $4 subsidy on toasters)
Now do example 3a...where we buy everything from China and Ukraine because high ranking politician has guaranteed himself a kickback for everything purchased from those two...
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