Thursday, April 5, 2018

Back to tariffs and tax efficiency

Navarro Says U.S. to Hold High-Level China Talks

The free trade argument rests on the idea the internal trade is not 'tariffed' . Trade advocates know this to be true but spend no time complaining about it as the discussion gets no where except a political party debate.

 But we control some flows internally, they have internal tariffs. Then we have this balance on the margin, what is the most efficient tariff.  Unrestricting external trade  may not enforce internal competition resulting in smooth evolution. The two tariffs are intertwined, as in large payments taxpayers make to Elon.

The free traders are right, but they do ignore the bumpy ride as the external and internal controls collide.  They are like the modelers debating models. The fewer the restrictions, the more accurate the model, a theory that applies to avalanches, so what?  We still have to consider that external tariffs may increase while internal tariffs decrease. We dunno the peak on the balanced marginal decisions.

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