20% Wall Tax

[JOhnH]

He's not negotiating. In order to do that, he has to listen at some point. But why would the Mexicans even pay $1 for the wall. There's nothing in it for them. Understand, while NAFTA didn't provide a dramatic amount of US export trade, it does provide some. For every gain that some local producer gets in protectionist tariffs, we lose more in exports that the Mexicans counter (either by reciprocating on duties or just not buying from us).

Listening to them isn't the same as cowering before them. The idea of a tariff isn't to raise revenue, it is to encourage fair trade.

 

[James331]

I imagine this will likely get closed down soon but since it was an active discussion in a friend's hangar I'll bring it up here.

The talking heads are all saying the 20% proposed border tax will just get passed on to the American consumers. I'm thinking NOT. If something is 20% more expensive I'm probably just not going to buy it. I might be missing something but I can't think of anything that comes from Mexico that I absolutely need to have.

What say you guys ?

Yup!

I think free market is going to end up having Mexico eat that 20%, because I don't like anything enough from Mexico to pay 20% more for it.

 

[flyingron]

Listening to them isn't the same as cowering before them. The idea of a tariff isn't to raise revenue, it is to encourage fair trade.

And it does this how?

 

[flyingron]

And it does this how?

Listening to them isn't the same as cowering before them. The idea of a tariff isn't to raise revenue; it is to encourage fair trade.

Nobody said squat about cowering before them. He slammed the door (wall) on Nieto. He's not listening. His own words were the 20% tariff was to pay for the wall. Of course, even if enacted, it won't work. It does nothing for "fair trade" either. What happens next is Mexico levies a similar tariff.

People forget there was pretty bipartisan support for NAFTA. It was George W Bush (last Republican with a fiscally responsible plan) who pushed for it even though it didn't get signed until Clinton was in office.

 

[overdrive148]

Yup!

I think free market is going to end up having Mexico eat that 20%, because I don't like anything enough from Mexico to pay 20% more for it.

Ferengi Rule of Acquisition #3 - Never spend more for an acquisition than you have to.

(Not for actual consumption, I just like quoting the Rules once in a while)

 

[coloradobluesky]

google "trade barriers wiki" and "tariffs wiki".

 

[Chip Sylverne]

He's not negotiating. In order to do that, he has to listen at some point. But why would the Mexicans even pay $1 for the wall. There's nothing in it for them. Understand, while NAFTA didn't provide a dramatic amount of US export trade, it does provide some. For every gain that some local producer gets in protectionist tariffs, we lose more in exports that the Mexicans counter (either by reciprocating on duties or just not buying from us).

You'd be surprised what NAFTA did for our export trade with Mexico. $17 billion in AG exports, our third largest export market for corn, soybeans, pork, beef, and poultry. they could fairly easily source much of that from South America.

 

[Chip Sylverne]

The other thing that rarely comes up in these conversations is that trade (current account) deficit is also a capital account surplus, depending on which side of the balance sheet you're looking at.

 

[Ravioli]

I noticed one of the observations about the purpose of the Berlin having been to keep people in was written by a guy whose avatar is Sergeant Schultz. Too funny.

Tariffs generally are used to raise the cost of imported good to the price of the domestically produced good. They are not paid by the consumer per se, unless you assume the domestic produced items are sold at the lower cost. This isn't always the case. People prefer California Avocados to Mexican Avocados because a) they think they test better, b) the marketing campaigns tell them they are better, and c) the Mexicans picking California Avocados are required to bathe more frequently. (SARCASM)

A blanket tariff is unlikely to work. It needs to be adjusted to raise the price of competitive products and there is no smooth constant for that.

From a United States First perspective, tariffs are an excellent protectionist tool.

See that... nothing political. Just a discussion of how and why tariffs work to protect domestic industries.

 

[Sac Arrow]

We need affordable labor, badly. Instead of a wall, how about a simplified worker visa process, and getting rid of citizenship by birth right. I like win-win solutions.

 

[PaulS]

We need affordable labor, badly. Instead of a wall, how about a simplified worker visa process, and getting rid of citizenship by birth right. I like win-win solutions.

I agree with this, we also need this labor to pay income taxes. But we still need a wall to stop all the illegal crap from coming over, well most of it anyway, by simply being walked across. We also need jobs, there are 96+ million discouraged workers, we need to get them back to work. One way is to keep the jobs here, here. Then we need to remove the obstacles for job creators, which seems to be in the works.

 

[mscard88]

Also different climates are better for different kinds of crops. One of my friends is a farmer in Wisconsin. They don't grow avocados.

They grow cheese curds and beer in WI right?

 

[mscard88]

As for oil what effect will the two new pipelines have ? How well will the Iranians follow OPEC's orders ? I think oil prices are headed lower IMO.

Plus we get all that "free" oil from Iraq to pay us back, right? Right?

 

[Everskyward]

Better yet, threaten them with a 20% tariff, then negotiate more fair trade deals instead. Fair trade good; unfair trade bad.

What is "fair"? If a tariff is imposed it might help those that produce whatever it is in the US but it will hurt the consumer. In Mexico, the workers who were producing stuff in their own country might be out of a job and be more inspired to cross the border.

 

[Gary]

Not a trade expert... so... what is a good example of an unfair trade issue (understand the social problems) that we have with Mexico. If they do exist, would seem a logical point to start from. US business has invested a lot of capital in Mexico, they obviously believed they would receive a decent rate of return on the investment, would not seem logical to endanger that if it can be avoided.

On the 20,000 ft. level, would seem to be in America's best interest that Mexico NOT become an economic basketcase. Yes, they probably need us more than we need them, but why create an enemy when we don't have to.

 

[Ravioli]

We need affordable labor, badly. Instead of a wall, how about a simplified worker visa process, and getting rid of citizenship by birth right. I like win-win solutions.

"Affordable" is a lovely and worthless word. And this topic is going to go quickly to a lock.

Who decides what "affordable labor" is?
Certainly not the American workers who are being pandered to and protesting for $15/hr "living wage" to flip a burger.
Certainly not the Labor Unions who are no longer relevant for worker protection and instead focus on increasing dues paying headcount to line their own pockets.
Certainly not the Corporations who are enslaved by the almighty dollar to the extent they will abuse anyone to get an extra penny in stock price.

We've got plenty of laborers. What we need are laborers willing to work. Crime in the streets will decline greatly when people are forced to use a shovel or lawnmower to pay for their drugs instead of state subsidies and guns.

 

[mscard88]

And this topic is going to go quickly to a lock..

Yep! Therefore ...

 

[FlyingElvii]

He's not negotiating. In order to do that, he has to listen at some point. But why would the Mexicans even pay $1 for the wall. There's nothing in it for them. Understand, while NAFTA didn't provide a dramatic amount of US export trade, it does provide some. For every gain that some local producer gets in protectionist tariffs, we lose more in exports that the Mexicans counter (either by reciprocating on duties or just not buying from us).

There is PLENTY in it for them.

$60 Billion in trade differential, $54 billion in electronic remittamces. and untold billions in illict drug money.
A WHOLE lot of people are making a whole bunch of money from this. You can tell, because they are the ones screaming the loudest.

 

[mirage00]

Apple builds an iPhone in china for $100 sells it here for $600. If they built that phone here, could it sell for the same amount? If so, Apple margins and profits would be less. Did the consumer get hurt?

 

[Unit74]

Apple builds an iPhone in china for $100 sells it here for $600. If they built that phone here, could it sell for the same amount? If so, Apple margins and profits would be less. Did the consumer get hurt?

Don't know... Are they willing to settle for anything less than $600% margin?

 

[Ravioli]

Apple builds an iPhone in china for $100 sells it here for $600. If they built that phone here, could it sell for the same amount? If so, Apple margins and profits would be less. Did the consumer get hurt?

Does the consumer need an iPhone? No.
Is the consumer improved by an iPhone? Arguable.
Is society harmed by the iPhone? Also arguable.

Is the iPhone an average-to-poor PDA and terrible telephone? Yes.

But I'm not sure what point you're trying to make, since tariffs don't apply to things that are not produced domestically.

If you're advocating for repatriating production you're moving to another (mostly political) topic.

 

[EppyGA]

Apple builds an iPhone in china for $100 sells it here for $600. If they built that phone here, could it sell for the same amount? If so, Apple margins and profits would be less. Did the consumer get hurt?

Hmm, no marketing, advertising, supply chain or R&D costs. That's quite deal.

 

[Tom-D]

I'm going to start a store front in Venezuela pick the stuff up in Mexico, ship direct to the US as imported from Venezuela.
20-35% cheaper than the direct buy.

 

[Sac Arrow]

"Affordable" is a lovely and worthless word. And this topic is going to go quickly to a lock.

Who decides what "affordable labor" is?

Ultimately, the consumer. When products and commodities are priced out of the market by labor costs, then the labor is not affordable. It's not rocket science.

 

[German guy]

I work for a global organization, which is making car components all over the world. You'd be surprised, how similar the final costs of many components are, no matter if they are made in Europe, Mexico or the US.

In the countries with high labor costs, you see a lot more automatization, have lower logistic costs, less currency risks, qualified personal is usually easier to find, less capital is employed during the transport of the goods and so on.

For parts which can be produced in a highly automatized process, a few percent (often less than 5%) in import taxes or change of the exchange rate (e. g. if China would stop keeping their currency artificially low), can often make all the difference between a production location in China, Mexico or the US.
Just think about cars of which some models are made in the US, while others are made in Mexico - its not like the US made versions are 30% more expensive, as some want to make us believe. IF our new government is keeping what they promised, and will also lower the corporate taxes and provide other incentives for local manufacturers, the costs for many products might remain unchanged.

For stuff which cannot be made in the US, I would however indeed expect a price hike, depending on the tariffs they finally settle on. It will therefore certainly not be possible to bring all production back to the US.

 

[Acrodustertoo]

I think the biggest issue is the millions of illegal citizens in the country who are bleeding the system dry. If we could solve the free access to our free services and cash and food then the wall would essentially pay for itself in saved revenue. I believe the cost for these migrants being brought in from across the pond are costing the U.S taxpayer somewhere north of 30k a year in free services. That is insane. We have workers available but there is nothing to motivate them to earn it.
20% tax, great idea. Now let's start imposing a tariff on these Chinese goods and we could really get somewhere.

By the way, most of our imported fruit and veg in my neck of the woods are from Chile, not Mexico.

 

[Chip Sylverne]

The Center for Immigration Studies published a paper showing the net cost to the US of illegal immigration as roughly $10 billion. Not good, but short of the cost of the wall, and but a rounding error of the cost of the $1.1 trillion social welfare system.

 

[German guy]

The Center for Immigration Studies published a paper showing the net cost to the US of illegal immigration as roughly $10 billion. Not good, but short of the cost of the wall, and but a rounding error of the cost of the $1.1 trillion social welfare system.

Keep in mind, though, that most illegal immigrants simply enter as tourists and stay with family.

 

[Chip Sylverne]

Not a trade expert... so... what is a good example of an unfair trade issue (understand the social problems) that we have with Mexico. If they do exist, would seem a logical point to start from. US business has invested a lot of capital in Mexico, they obviously believed they would receive a decent rate of return on the investment, would not seem logical to endanger that if it can be avoided.

On the 20,000 ft. level, would seem to be in America's best interest that Mexico NOT become an economic basketcase. Yes, they probably need us more than we need them, but why create an enemy when we don't have to.

The biggest issue with Mexico, and China too for that matter, is that they add a 17-19% VAT to everything sold in the country, imported or not. For political reasons, that's been jumped on as the "yuge border tax" added that makes US goods uncompetitive. In reality, there is a difference, but is less than 5 percentage points. The real difference is that the US has a capital advantage, while the others have a labor cost advantage. But since Jack Ma was referenced earlier, he also recently said the US has squandered that advantage on wars for the past thirty years, instead of investing in people and infrastructure. It's caught up with us.

The currency peg issue is another matter.

 

[Chip Sylverne]

Keep in mind, though, that most illegal immigrants simply enter as tourists and stay with family.

Kinda makes $15-25 billion on a wall seem a little redundant then, doesn't it?

 

[GRG55]

But, at or near +20%, American farms might be able to compete, so maybe an increase in the number of farm workers.

Do you seriously think American farms are having difficulty competing? Really.
Check the value of agricultural export statistics for a few countries out there and see if you can find even one that comes close to the USA.
The trade ******** that is being promulgated by Mr. T plays well with those who don't think facts actually matter.

 

[GRG55]

Better yet, threaten them with a 20% tariff, then negotiate more fair trade deals instead. Fair trade good; unfair trade bad.

"Fair" trade is just like "fair share" of taxes...entirely subjective, and influenced by ideology.

 

[GRG55]

Actually, it worked pretty well for it's intended purpose. Which was to keep people in rather than keep them out. In other words, completely different.

It wasn't the wall. It was the fact the East German government wouldn't hesitate to shoot its own citizens...a lesson the Chinese, among others, apply with notable success (think Tiananmen). Do you expect the United States government to start shooting people coming over the wall? If not I see little possibility the wall will be much of a deterrent.

 

[silver-eagle]

One of the points never mentioned by the media is we already have walls at the borders, Canada and Mexico. We also have customs at every point of entry. We spend millions keeping people out. Trump wants to extend the wall between us and Mexico by 2,000 miles. I for one, do not believe for a second that additional 2,000 miles of wall on our southern border will make a huge difference other than to make criminals more ingenious.
I often wonder what people think "undocumented aliens" are. Along with that, what other countries would do to a U S citizen that crossed their border illegally and planned to stay. Oh, wait. Didn't we have 3 college students spend over a year in jail recently for just such a thing.
Does the word SPY come to mind?
I think the wall is more symbolic than something physical. We would not be the only country to have a wall, just one that made it an electable topic.
On a labor point, a Massachusetts company wants the contract to supply the fencing. If they get it, they plan to hire over 100 additional skilled workers to get it done.
The consumer always pays. A tariff is nothing more than a tax. A user fee is a tax. A tax is nothing more than an added cost to the consumer. And said tax is additional revenue for some local state or federal gov't or department to use for.... collecting more tax.

 

[JOhnH]

Apple builds an iPhone in china for $100 sells it here for $600. If they built that phone here, could it sell for the same amount? If so, Apple margins and profits would be less. Did the consumer get hurt?

Which consumer are you asking about? The American consumer that is now working in the new American Apple plant didn't get hurt. They are earning money, paying taxes, buying cars and houses and eating in restaurants.

 

[JOhnH]

It wasn't the wall. It was the fact the East German government wouldn't hesitate to shoot its own citizens...a lesson the Chinese, among others, apply with notable success (think Tiananmen). Do you expect the United States government to start shooting people coming over the wall? If not I see little possibility the wall will be much of a deterrent.

All right. Maybe the wall isn't the best method to control illegal immigration. Which method have we used in the past that worked better (besides the great recession).

 

[Chip Sylverne]

Customs and Border Patrol's budget is just shy of $14 Billion yearly.

 

[JOhnH]

Customs and Border Patrol's budget is just shy of $14 Billion yearly.

Perhaps Trump's threats will get the Mexican government to help prevent the problem then we wouldn't need to spend so much time at it. The biggest problem now is not the Mexicans coming across the border. It is South Americans that are coming through Mexico. The Mexican government won't let them stay there and wont' stop them from coming here.

 

[Tarheelpilot]

He's not negotiating. In order to do that, he has to listen at some point. But why would the Mexicans even pay $1 for the wall. There's nothing in it for them. Understand, while NAFTA didn't provide a dramatic amount of US export trade, it does provide some. For every gain that some local producer gets in protectionist tariffs, we lose more in exports that the Mexicans counter (either by reciprocating on duties or just not buying from us).

It did for Texas.

 

[Tarheelpilot]

It wasn't the wall. It was the fact the East German government wouldn't hesitate to shoot its own citizens...a lesson the Chinese, among others, apply with notable success (think Tiananmen). Do you expect the United States government to start shooting people coming over the wall? If not I see little possibility the wall will be much of a deterrent.

Yes