Tariffs

 This will be brief.

Tariffs are only raised because domestic companies costs are too high in other words they are inefficient.

If you raise tariffs tariffs you raise costs. In Australia about three quarters of our imports are either capital goods or intermediate goods.

That being so companies can only have two responses. They absorb the costs and thus reduce profits or they pass on the higher costs and inflation rises.

The cost structure of domestic industry rises and inefficiency permeates the whole economy with exporters bearing the most pain. Domestic competition is lessened. Tariffs affect low income households the most as they must pay more of their incomes on higher priced goods.

We know all this as Australia experienced all this before Hawke and Keating reduced tariffs here. We used to pay a fortune for clothing for example.

In other words tariffs are bad news. they raise prices for the low income households and increase costs to exporters.

In the USA for example imposing tariffs will not mean more domestic coffee or bananas because of climate reasons.

stupid is as stupid does !!!