Saturday, February 13, 2021

Tariffs are Taxes

Tariffs are not just annoying.

Image from Wall Street Journal
I know that many people thought that tariffs on goods from foreign suppliers would be lifted when the new administration took office, but the reverse is actually true. 

The tariffs have remained. The tariffs have even remained on European products like wine and cheese. 

The Wall Street Journal reports:

Tariffs on Wine, Food From Europe to Stay for Now, U.S. Says

Decision came despite intense lobbying by the U.S. restaurant and beverage industries that are already reeling from the Covid-19 pandemic

I am not a fan of tariffs as they are obstructions to trade. And worse, the food and wine tariffs for European products are in response to disagreements over aircraft industry subsidies. 

The real problem with the wine tariffs, according to the WSJ article, is as follows:

Wine represents the largest source of profit for many restaurants, he said, and more than 80% of the burden of the tariffs are absorbed by the U.S. businesses and consumers, rather than by European wine producers.

And that is the larger problem with tariffs--it is the American consumer that pays the bulk of the cost.

Tariffs are a hidden tax. The former administration ignored that fact by constantly asserting that the foreign countries were paying into the treasury and the current administration is the facade to help pay off the deficits run-up by the former administration.

--Bob Doan, Elkridge, MD

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