The Tariff Issue – PaulCraigRoberts.org

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14-05-19 05:38:00,

The Tariff Issue

Paul Craig Roberts

Wherever I look at US policy, foreign or domestic, I see only insanity, ignorance, and incompetence.

Take the issue of tariffs, which is Trump’s mistaken approach to bringing the jobs back home. The tariff “solution” overlooks that offshored US production counts as imports when US firms bring their goods into the US to be marketed.

The Chinese did not steal American jobs by selling below US cost.  The jobs were taken to China by US global corporations, along with the technology and business know-how, for the sole reason of maximizing US corporate profits.  Labor, made as productive as US labor by offshored US capital, technology, and business know-how, could be hired at much less cost in China and elsewhere in Asia due to the enormous excess supply of labor that overhangs Asian labor markets.  The enormous cost savings went directly into US corporate profits, capital gains for shareholders, and bonuses for executives.  Half and perhaps more of the “cheap goods” imported from China are the goods of American firms, such as Apple, Levi, Nike.  They are products of US firms that are made in China for sale in the US.  They are not “cheap Chinese goods.”  Do you think an iPhone is cheap or a MacBookPro is cheap?

The tariffs fall on American goods produced offshore by American firms for sale in America.  The tariffs will reduce the profits of American overseas production and raise prices to US consumers, who have already lost the incomes from the manufacturing jobs that American companies moved abroad.  

In other words, tariffs are not a solution.

The only way to bring home the offshored American jobs is to change the way US corporations are taxed.  No, this does not mean to lower corporate taxes.  The way to bring the jobs home is to tax corporations on the basis of the geographical location in which they add value to their products.  If US corporations produce in the 50 states for their US market, the tax rate would be low.  If they produce abroad in China or elsewhere for sale in the US, the tax rate would be high.

The tax rate on offshored production for US markets would be calculated to offset the lower labor and regulatory costs abroad.

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“Rush Game With The Tariff”: The Race Is On To Get Chinese Goods Into U.S.

“Rush Game With The Tariff”: The Race Is On To Get Chinese Goods Into U.S.

21-09-18 09:31:00,

As the US-imposed 10 percent tariffs on $200 billion worth Chinese goods is set to take effect Monday, the race is now on to get Chinese goods into the U.S.

By plane, train, and sea, a frenzy has begun, resulting in surging cargo traffic at US ports, booming air freight to the US, and urgent dispatch of goods from Chinese companies earlier than planned. Getting in under the wire before Trump’s tariffs bite could mean hundreds of thousands saved on single shipments. 

Bloomberg describes this week that cargo rates for Pacific transport are at a four-year high as manufacturers rush to get everything from toys to car parts to bikes into American stores.

This rush, which comes on top of a typically already busy pre-holiday season, is expected to continue well after next week as the tariff will leap from 10 to 25 percent after the new year. 

US importers are expected to stockpile Chinese products before the 2019 25% mark. There’s currently widespread reports of companies scrambling to pay expedited air freight fees to dodge the new tariffs, as well as move up their orders. 

Bloomberg relates the following on both sides of the Pacific

  • In Jiangsu province on China’s east coast, E.D. Opto Electrical Lighting Co. dispatched a batch of car lights by sea to Los Angeles in late August, earlier than planned.
  • In the industrial hub of Dongguan in southern China, toy maker Lung Cheong Group: “More clients in the last two months are asking if we can deliver goods ahead of the scheduled time to avoid the upcoming tariffs,” said Chairman Lun Leung. For small high-tech toys that have higher retail selling prices, some clients are willing to upgrade from sea freight to air, he said.
  • Imports to northern California’s Port of Oakland surged 9.2 percent in August. That was the busiest August in the port’s 91-year history.
  • At the Port of Long Beach, imports of containers rose 9.4 percent this year through August. That comes after a record 2017.
  • Concerns about the trade dispute is also spurring last-minute shipments across the Pacific for Ocean Network Express Pte.,

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