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7 votes
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How does tariff increase inflation?

Foreign produced goods will see price increases directly as a result of the tariff, which adds to the prices of these goods. The full tariff may not be passed through, as these higher prices will ...
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5 votes
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What is the “entry price” in relation to tariffs?

Entry price system (EPS) is a EU-specific term relating to their food import tariffs, more specifically to fruits and vegetables. It's a somewhat complicated system designed to strongly discourage ...
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4 votes
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What is the game theory of retaliatory trade tariffs?

Indeed it's difficult to account for all the real-life complexities, but the basic game-theory model of trade wars is prisoner's dilemma, e.g. https://leadersatwork.northeastern.edu/management/trump-...
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4 votes
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Protectionism and smaller countries

There are sometimes cases where protectionist trade policies are a good thing. (note this is a big debate, so a bit of bias here). Lets look at an example to make it clear... Suppose I'm country A ...
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3 votes

Is Universal Basic Income compatible with free international trade?

There is nothing to prevent other countries "taking advantage" of an export market's UBI. However, I don't think that that implies a country introducing a UBI would need to increase tariffs, and I ...
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3 votes
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1929 stock market crash and unemployment rate

One caveat to the author you refer to, Thomas Sowell is a staunchly conservative economist, so most arguments you hear from him will stick to the Econ 101 wisdom that government intervention is ...
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3 votes

What level are EU tariffs mostly?

To summarise crudely: the tariffs are punitive, to give all producers within the EEA as much of an advantage as the trade negotiators could deliver. And because the EEA represents a wealthy group of ...
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  • 8,002
3 votes

Is there any mechanism to prevent tariff 'exile'?

No, there is no mechanism or force that prevents the USA's (current/former) trading partners from cooperating amongst themselves to ramp-up trade amongst themselves to compensate for reduced trading ...
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  • 8,002
3 votes

How can we estimate the tax incidence from a 20% tariff on Mexican goods?

Due to the tariff, the supply of any product being imported from Mexico to the U.S will shift back. This would mean that prices of goods will increase in the U.S itself and most of the tariff will ...
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3 votes

Why does lowering the value of yuan against the USD disadvantage the US and benefit China

The article reflects a consensus view of the trade situation between US and China. Personally I see it differently : China has been willing to make and ship trillions of dollars’ worth of goods to ...
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2 votes
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What level are EU tariffs mostly?

Thanks to Ubiquitous for finding this paper. Just scanning by eye it seems it could be summarised by saying: the bulk of items have a tariff in the range 5-10% with a smaller amount either less than 5 ...
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  • 1,001
2 votes

What is the proof for why border adjustments are exactly offset in theory by currency appreciation?

Here is a reference by Feldstein, Krugman that is often quoted when discussing the FX neutrality of border tax adjustments: http://www.nber.org/chapters/c7211.pdf Another useful reference that takes ...
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2 votes

Abolishing all tariffs without reciprocity

You get cheaper access to inputs. For a large advanced economy that is relatively diversified, it is possible that unilateral tariff reductions across many or all sectors can be good for the economy ...
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  • 636
2 votes

Are Tariffs Refundable?

can a company write off these tariffs and eventually receive a tax refund on the import taxes they paid? A country might enact provisions to exempt (possibly via a refund) from tariffs if the ...
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2 votes

Tariff long term effects

We don't know. Consider the following possibilities: The tariff lasts long enough that the United States soybean farmers switch from soybeans to some other crop. When the tariff is dropped, they ...
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  • 1,152
2 votes

Is Iphone included in tariffs?

As of April 2018, the tariffs are targetted at products in which Chinese companies dominate. They would apply to products made by American companies in China and imported to the US, but the exact ...
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2 votes
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How do tariffs work?

Assuming a competitive global market, If an importer would by steel in the global market in global prices, he will have to absorb the tax cost at importing, then roll it to its customers at home The ...
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2 votes

Chinese tarriffs (pre-tradewar)

First a disclaimer: Trade imbalances are something that we should expect to happen, especially between two massive economies like the US and China. In fact, it will probably be very hard to find a ...
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2 votes
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In demand and supply chart, why is it assumed that import will only happen if domestic suppliers are unable to supply?

The standard supply and demand model is a model. Models by definition are distorted version of reality not reality by themselves. The model also ignores transportation costs and other real life issues ...
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2 votes
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If protectionist policies hinder economic growth, why do we need border taxes at all?

From pure trade theory perspective there are cases where tariffs can improve welfare of a country provided it is big economy (economy that can affect international prices). And there can be also other ...
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2 votes
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Does the WTO monitor the trade of players in association football? Could they?

No, for several reasons. WTO deals with trade disputes between nations when one nation creates legislature that breaks WTO rules or some pre-existing trade agreement. For example, one of the most ...
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  • 42.2k
1 vote

How does protectionism harm the producers and workers in export sectors in the country implementing the protectionist policies?

Several channels I could think of: As you said, protectionist policies tend to raise the cost of goods that could previously be imported. If these goods are intermediaries for the export sector, the ...
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1 vote

Is it correct to say that import tariffs are unilateral?

It depends on the importing country or bloc (X), and the country the import is coming from (Y), and the product category (Z). If X is not a WTO member, and is not party to a trade agreement with Y, ...
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  • 1,346
1 vote

tariffs and inflation

Across the board tariffs (ex: sales tax) can result in higher prices or "inflated" prices. This is usually not what economists refer to when they say inflation. Inflation that the fed is concerned ...
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1 vote

How is currency depreciation related to import tariffs?

One answer and one comment here make the false claim that tariffs are equivalent to currency depreciation, playing around with the exchange rate of your currency can "eliminate" a tariff, and so forth....
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1 vote
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How is currency depreciation related to import tariffs?

Assume that a chinese company is selling a product for 100 RMB or 16 USD. With the 10% tariff the cost for an american importer rises to 17.6 USD. If the the RMB depreciates 8% and the price in RMB ...
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1 vote
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How can we estimate the tax incidence from a 20% tariff on Mexican goods?

A working paper on this question was just published, albeit the document is in Spanish. The abstract is in English though. The report is solely concerned with inflation. Here is the abstract: The ...
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1 vote

Effects of tariffs on company

In the case of Apple at least, the answer is yes: this article dated August 31 2019 talks about the impact of the latest round of tariffs on Apple products produced in China. Apple, the largest U.S....
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1 vote

Do Chinese tariffs on American goods make them more expensive to American consumers?

Well, due to Lerner's Simmetry Theorem, an import tax has the same effect of an export tax. When China makes its imports from the US more expensive, its exports get more expensive too.
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