German Banks Call on Europe to Show Restraint in Tariff Conflict
Bloomberg - Are you a robot?
Heiner Herkenhoff, managing director of the German Bankers Association
“There is no point in striking back hastily with additional measures,” Herkenhoff said
Hmmm, no
Thats what Putin said to Zelensky
can't let trump behave like a toddler in tantrum, some firm feedback is needed
Tariffs equal a tax that governments charge on imports. This tax is paid by local/domestic importers, not foreign exporters. The government collects this "tax".
If the government said let's increase taxs the public would be furious at the grocery/checkout line. But saying, "let's tarrif foreign countries" seems to imply that locals won't be paying these taxes.
To retaliate countries should instead tack on a surcharge to exported goods to the US. This cost would then be past onto American importers in a increased cost of goods and raw materials.
The surcharge to exported goods can be collected by the local government and used as a stimulus for the local economy.
TLDR: Tack on an export surcharge to the US, this stacks on top of the US import tariffs their government charges their local importers. The US locals now need to pay their tarrif and the surcharge which increased the price of the goods for US two fold.
So that lowers the margins and volumes of domestic exporters that export to the US even further. Meanwhile American exporters who sell domestically get to keep their margins and volumes.
Yes, put it that way i agree it does not sound good.
A company in the EU for example will be forced to lower its volume of exports of goods and raw materials even further to the US as Americans won't be able to "afford as much". Especially with an export surcharge fee payed for by American importers.
Though we forget Americans will now be forced to pay more for raw materials imports. This means anything they sell or export will also now be more expensive. If not impossible to manufacture.
Why should we make things affordable for Americans and not our local population?
A export surcharge fee could mean that any EU companies still currently reliant on goods or raw material imports from the US for the time being have time to adjust without a blanket tax being applied.
My argument is that a "blanket tax" on imports affects the "working class" directly with increased prices of goods locally. If countries all unanimously "fire back" with surcharges on exports to the US, it affects the whole American supply chain with a increase in cost of goods.
On top of the Tarrifs the US government is already making its US citizens pay.