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Tariffs? I have questions [1]
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Date: 2025-01-31
This is my first post. Just saying.
I have a question about tariffs.
Assuming a nation feels they need to respond to tariffs with tariffs, other than the obvious, are there reasons for them not to use export tariffs rather than import tariffs?
With an export tariff, the exporter makes money (or loses that market share), but the costs are paid for by consumers in the importing country (just like import tariffs).
More discussion about the question, below the fold. I'm hoping people with an Econ background read and respond.
Thank you.
When you respond, I'm a math prof so I can do the numbers. My Econ background is limited to that of a general wonk/geek (I understand Krugman, just fine).
We've all been informed of the many reasons tariffs are a bad idea and the harm a country experiences when they impose import tariffs on things they need.
I get that export tariffs would reduce demand for the exported product. But if an importing country can't produce the product and other sources are limited then the price is basically inelastic.
If I'm gaming out the rhetoric, something along the lines of
"The US believes it needs to reduce its trade deficit with our country. Our experts don't understand this but they're not as knowledgeable about the US economy as its own are.
"We'll help the US build its own base to allow it to reduce their trade deficit by imposing matching export tariffs on goods that the US tariffs. This will help the US to build its own infrastructure producing [coffee, semi-conductors, whatever]."
If a country like Columbia wanted to rub it in, they could even bring up patriotic US history. "The American people became a coffee-drinking nation almost overnight after the heroism shown at the Boston Tea Party. Surely, the American people are resilient enough to once again switch their morning beverage." In truth, coffee being a global commodity and given Brazil's poor harvest, there won't be a shortage of buyers for Columbian coffee.
Back to the basic question: Why not employ export tariffs rather than import tariffs? This way, US consumers face a double impact.
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