Comment Re:It's ending... (Score 1) 258
If you overtariff your imports the local producers no longer need to keep their prices low to compete,
In addition, the imposition of a tariff assumes that there is local production to be 'protected' or 'encouraged'. If the only producer for a product is in a foreign country and it's not something that is readily done without, imposing a tariff just sucks cash out of the pockets of consumers -- an inherently regressive tax that hits low-income people harder than high-income people. And even if the tariff does spur local companies to begin producing a competing product, their startup costs and the tariff point give them no incentive to not price their product just below the tariff-raised cost of the foreign product, even if their actual cost is significantly less than that point. A good example of the 'no local competition' is plastic model kits. Virtually all of the manufacturers of plastic model kits are in other countries -- China, Japan, Germany, etc. -- and both the startup costs and lead times are significant; injection-molding machines are expensive, as are the molds to use in those machines, the expertise to make the molds is difficult to acquire, and it's time-consuming to set up a production line to make the kits, so you're likely looking at years before a local manufacturer can set up to compete with the foreign kitmakers. Then, because it's not a high-volume industry, current business-administration practices will drive pricing those kits as high as possible to recover the startup costs quickly, so the kits will be only barely cheaper than foreign kits.