They don't see themselves as part of the collective maybe?

Void, VAT is applied to EU goods unless they're exempt for special reasons, usually only if it's an essential good or supplied by a VAT exempt business with revenues under around £50000 a year. It has nothing to do with the US. If France buys a BMW from Germany, France pays the same input VAT rate that the US and all other countries pay.

Got passed that point of the conversation. Even without the vat 10% on American cars is much higher than the 2.5% euro cars face.

It mostly involves reading a lot to become informed about protectionist myths that were shredded 2 and a half centuries ago.

Trading paper for a smorgasbord of goods is not an inherently bad thing as claimed.
Nor is importing more cars from a country like Germany a bad thing either. They specialize in making cars, they don't need to import as many.
How is it harming you if i buy a German car?

should you be concerned about your trade deficit when you go to the grocery store?
how about the trade deficit between states?
why or why not?

Most of the time successful economies will have a trade deficit, and struggling economies will have a surplus.

The GDP formula itself is trash and requires serious examination.
https://mises.org/library/how-gdp-metrics-distort-our-view-economy



Its far from just libertarians who have a decent grasp of the issue and don't think trade deficits are some crazy bad thing that need to be reduced by government

"crazy assertion but plenty of people seem to believe this. to see the fallacy, note that banning imports would do it and would crush welfare"

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the fact that void keeps using german cars as an example should tell anyone reading this he's clueless. anyone who needs to simplify economics into "they better buy more stuff from us than we buy from them" is lost. doesnt even bother to ask what those numbers look like compared to what we buy from ourselves.

No one is saying importing cars from Germany is a bad thing, nor is anyone claiming that it's harmful for the individual consumer, but are you going to sit here and deny that american made goods are as competitive when those countries place tariffs on our goods in their markets? Do you not see how those tariffs make our firms less competitive abroad? 7.5% is a huge margin to make up and it's essentially pricing out our goods and services out of those markets.

In the long run what do you think will be the result of firms that have costs of doing business such as 7.5% more in taxes compared to a firm that doesn't face those barriers? If you are a policy maker that wishes to make our domestically produced goods more competitive internationally what steps would you take? Assume that costs have been minimized and when it comes to technology you can't make up the 7.5% what do you do? Shrug your shoulders and just say well economists say this is good and do nothing?

Also your graph is kind of misleading, when i think of citizens i think of consumers, obviously consumers will benefit from cheaper foreign goods. Trade deficits should be talked about in the context of producers considering they are the one directly impacted. The proper question should be is how are American producers impacted when they have to face tariffs in foreign markets.

The Germans make fine cars, and even w/o the tariffs would be beating our products imo, then why have the tariffs?

https://www.statista.com/statistics/256642/the-20-countries-with-the-highest-trade-surplus/

Outside of a few oil exporters on that list most of those countries are considered very strong economically.




You're not grasping my point, which is we need to push them to get rid of their tariffs so we can actually have something closer to free trade. Reciprocal tariffs is a solution i'm thinking of, what's yours?

This post was edited by ofthevoid on Mar 5 2018 06:21pm

You can't pay worker salaries with imported goods.

When workers dont have a livelihood, there is no economy.

The better alternative would be to ban German tariffs, but we cant do that.

just that i explained to you that the 19% VAT is irrelevant because you pay that on EU made cars as well and that the american tariff for trucks, the most popular cars in the USA, is a staggering 25%, not 2.5% - completely destroying your narrative...

You're implying there's a problem. I'm not.

Trade agreements all need some sort of clause that the sides that are "winning less" than others can enact. That's the real problem I see with any trade deal.

I think most trade agreements are agreed on so one member can be helped economically, or to allow them time for some startup industries, etc., and that the other member gains some other allowance that they desire.
Problem is that after those conditions are met, there needs to be a way to cancel the deal or shrink it enough that the original lend-ee doesn't suffer themselves.


Like the US and China for example. The US has/had trade agreements with China that in effect, helped China get to be a serious player in the world markets. Now however, it's getting out of hand. China's share of the world market is growing like a cancer. China in turn is not turning around and making trade deals with others that would help the others.
China is just sitting on all that "help" even though they no longer need it.

I don't know if tariffs are the answer, but the US for one, can't keep allowing China to ride the wave of the trade surplus they have versus the US.

The US has helped many many countries by means of various agreements, that are no longer conducive to the health of the US. They were NEVER good for the US but they had a trade-off value at one time.
In China's case they helped bring China into the economic 21st century. Now that China is there, it's time for China to move ahead on it's own.

This is just one example. There are tons of others. Point is, that the US has to start looking out for themselves a bit more, or the US will soon be a third world country.