A tariff buffet
On token claims, import taxes, and the need for clarity about the real purposes behind keeping foreign products out of a country
When a candidate promises "Whatever tariffs are required: 100 percent, 200 percent, 1,000 percent" on imported vehicles, it should be evident that the word "tariff" has taken on a purely tokenistic meaning. The effect is no longer about the actual effect of the taxes being imposed, but about the effort to use large-sounding numbers as an otherwise meaningless signal.
■ The European Union has slapped tariffs on Chinese-made electric vehicles, and both the United States and Canada have already imposed 100% tariffs on those imports just this fall.
■ All parties involved seem intent on spinning the tariffs as moves to "protect" or "level the playing field for" their own domestic auto workers. But that's where tariffs run out of gas: We should always pivot to calling them "import taxes", because that's what they are. And as with any tax, the burden falls in some portion on both the buyer and the seller.
■ "Tariff" sounds like something that someone else pays, but the reality is that regardless of where the tax is actually collected, cutting the check isn't the same as paying the price. Honesty would require describing this motivation clearly: The countries imposing import taxes want their own domestic consumers to pay higher prices in the nominal interest of subsidizing work for their fellow citizens...assuming that the intended effect actually plays out.
■ That's a big assumption, of course. "Protection" from competition often does little more than leave a domestic industry soft and sluggish. See, for example, the weakness of the US auto industry in the 1970s, when names like Honda and Toyota started to come on the scene. Both of those Japanese companies are now enormous US domestic automakers, because they kept on improving and Americans kept demanding more.
■ There may be a very serious case to be made for blocking the importation of vehicles from China over security concerns; it has been widely noted that electric vehicle manufacturing is now as much about computers as it is about wheels.
■ But if Chinese-made electric vehicles are riddled with security risks (as well they might be), then import taxes are unlikely to be the solution -- especially if they're only meant to "protect" domestic industry. Trade policies motivated by security concerns should have clear security effects. Otherwise, it just looks like a reward for a small segment of workers getting preferential treatment at their fellow citizens' expense.
