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The question is would prices go up enough to offset any improvements to wages and employment. If prices went up a few cents, but wages and employment went up moderately or a lot, it would be worth it. But if there aren't improvements to wages and employment than obviously higher prices simply a negative outcome.
I agree but Republicans and Trump fret over the minimum wage. I don't see improvements in wages and employment.
We don't produce things that the average family consumes on a regular bases. Clothing, under wear, shoes, toys, etc.
There will be INFLATION and stagnant wages. Jimmy Carter style.
The only way the US can break that commitment is by negotiating with the countries concerned, i.e. Mexico. No way Mexico will go along with it.
Trump's response - pull out of the WTO. He's already threatened to do so more than once. Of course, doing that would be beyond crazy and Congress would never agree. Unfortunately, Trump as President may well have the authority to do so - the relevant statues aren't clear and certainly never have been tested.
Quote:
Republican presidential nominee Donald Trump threatened to pull the U.S. out of the World Trade Organization if membership in the global trade body interferes with his plan to impose penalties on companies that move American production offshore.
The problem is the US taxes with income taxes which means all the taxes are built into the product upon export. Then an additional tax is paid in the host country. Mexico's goods are not taxed in Mexico with VAT since Mexicans are not buying them. So they are sold in the US tax free in Mexico and tax free in the US. That is no taxes on Mexican imports and all taxes on US goods.
Any idea on why we cannot compete?
Your post is pretty much pure game playing. Us manufactured products are made pretty close to tax free. Average US profits are about 7% and the tax is under 20% of that...so about 1.4% So that is the worst disadvantage of a US supplier and for many it approaches zero. In return for which the US consumer avoids VAT which can up the cost of product 30 or 40%. We may see some version of VAT now as the Republicans try to figure out how to pay for their programs.
We can't compete on high labor things. It is inherent. The Mexicans still cannot get to US productivity but offset it with much lower wages. Simple as that.
I would note that the growing automation may well move much production back to the US as it reduces the labor content while while increasing the value of capital investment and technological capability.
This does not of course offers much help for US employment. More production yes...but with lower labor hours.
The American consumer will pay for it. Most likely it will lead to a net loss of jobs too. If the worker does benefit the consumer will suffer more than any worker benefit. It will hurt Mexico too. The economic pie will be smaller. Protectionism is stupid.
Trump's response - pull out of the WTO. He's already threatened to do so more than once. Of course, doing that would be beyond crazy and Congress would never agree. Unfortunately, Trump as President may well have the authority to do so - the relevant statues aren't clear and certainly never have been tested.
Tacos and what else do we really purchase from Mexico?
We purchase goods made in mexico from U.S. companies that have factories in that country.
President Trump is working to bring many of those companies back to the USA.
Those companies that choose to fire Americans and open up facilities hiring Mexicans, then try to sell goods in the USA will be the ones paying for the wall.
Those companies will have to sell their goods coming from Mexico at a higher price, Americans will have a choice of buying American goods or overpriced goods from Mexico.
"Made in America" goods will have the advantage over foreign goods again.
Personally, I can't wait! "Made in America" goods were always of higher quality and durability than goods from China, Mexico etc.
We have farm land here. We don't need Mexican tomatoes. We can produce more product here. We have plenty of rich farmland that is not being used. America first.
*stands and cheers like Gabby Johnson in Blazing Saddles*
Rrr-rrr!!
Plow up the national parks and golf courses!! Screw the tourists who needs 'em!
Tell them Midwestern farmers to plant year-round, we can grow in snow! And in the places where there's a drought, what are they thinking? Who needs water to water crops??
Well, yes, except that we're now right back at the beginning. Who is it that actually picks the produce in American fields - illegal immigrants. So the benefit to American farmers is predicated on the existence of the very element that the tariff (and the wall) is designed to prevent?
No, not at all. I'm for doing things legally. Stop the illegal immigrants from coming here, hire temporary migrant workers to do the work. That's how it's suppose to be done. No need for your teenager to pick grapes and lettuce. Pay legal migrant workers a decent wage to do the work and be fair to them. They'll come back year after year to do the work.
Yes, you may pay a little more for groceries, but you should have been paying a little more all along. Farmers will charge a little more. I'm fine with that. Farmers make a profit, migrant workers are not payed slave labor wages and people can still buy fruits and vegetables. If the cost of tomatoes and lettuce gets out of control due to greed, they can be imported from countries other than Mexico like they already are at reasonable costs.
Enjoy those $20 salads at McDonald's just like I said would happen.
LOL, who's fault is that? If you don't want to buy a $20 salad at McDonald's then don't.
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