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Ocelot II

(129,043 posts)
Wed Apr 9, 2025, 06:26 PM Apr 2025

So here's a thing I don't understand about tariffs - or at least Trump's theory of tariffs.

At least on Earth I, tariffs are imposed in order to make a particular imported product more expensive than the home-made equivalent. People either buy the domestic product or pay extra for the imported one, with the tariff being paid to the Treasury. Trump claims (A.) that American businesses will build lots and lots factories to produce the products that are now being imported, creating lots and lots of jobs (at least this is his sales pitch to MAGA), and (B) that tariffs can make income tax unnecessary. But here's the fallacy: If (A) is successful, (B) won't work. That is, if the factories start making all the things in the US that no longer have to be imported, tariffs can't be collected on those things. And without the income tax, now there's no revenue at all. Now what? How does he sell the abolition of the income tax if there aren't any tariffs to make up for it? There has to be some money in the Treasury for Trump and Musk to grift. Am I missing something?

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So here's a thing I don't understand about tariffs - or at least Trump's theory of tariffs. (Original Post) Ocelot II Apr 2025 OP
Well, he did get the acting IRS Commisoner to resign. kentuck Apr 2025 #1
There would be a sweet spot for any tariff Shermann Apr 2025 #2
Exactamonte. Utopia ignores fallacies. cachukis Apr 2025 #3

kentuck

(115,101 posts)
1. Well, he did get the acting IRS Commisoner to resign.
Wed Apr 9, 2025, 06:28 PM
Apr 2025

Maybe he wants to just do away with the IRS completely?

Shermann

(9,007 posts)
2. There would be a sweet spot for any tariff
Wed Apr 9, 2025, 06:33 PM
Apr 2025

It needs to be high enough to protect US businesses, but low enough to generate revenue by not creating complete demand destruction of the competing imported products.

In my opinion it is more effective with industries that create raw goods like steel and less effective for products with complex supply chains like electronics. Those factories can take 8-10 years to relocate to a different country. No company wants to be the first to move so they will watch what other companies do. What the other companies will do is wait out Trump's second term. That's the real fallacy here.

cachukis

(3,670 posts)
3. Exactamonte. Utopia ignores fallacies.
Wed Apr 9, 2025, 06:53 PM
Apr 2025

If we provide everything we want and desire here, we would be living on Earth I; the globe. Alas, some want to limit us to Earth II, sans the incursions of tacos and brie.
And Earth II wants all the benefits we've come to enjoy but only directing our pocket books to those we think follow our ideology.
Lunacy lives.

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