UPDATE: As a result of tariffs imposed on tires imported from China the following has resulted:
1. The domestic price of tires (mainly low to mid-range price) has INCREASED because of the tariff (cash off the top going to the Federal coffers)
2. The domestic supply of tires has DECREASE because of fewer tires are imported to the US from China which INCREASES the price of tires
3. Chinese manufacturers of tires are quickly moving production of tires to other countries to avoid the tariffs imposed on them.
4. Domestic (US) manufacturers of tires are NOT ramping up production because, (1) they are a minor player in the US market for inexpensive tires, and (2) if they are in the market they know that the supply will INCREASE in the near future when the production from countries other than China makes it ways to our shores. They will simply take advantage of the higher prices and not expand production in a meaningful way and will NOT add employees in a meaningful way either.
5. NO permanent jobs will be created by this tariff, however jobs will be lost (perhaps only temporarily) by (1)people who work in at the disembarkation point of the tires,(2) truckers who move the tires around the country, (3) employees at tire retailers (epecially ones who specialize in the inexpensive tire business) because the higher prices will reduce demand for the tires.
6. People who can least afford the tires will be disproportionally hurt---the tariff along with seasonal increase in demand puts upward pressure on the price of tires.
My question (because I have been SO negative): Who WINS in this situation?? Please post your answer...I know some of the winners but believe I can learn from you!! :)
If you want to read an excellent book on trade and tariffs that is written in the form of a fictional narrative, please check out "THE CHOICE"...
No comments:
Post a Comment