The president wants to make foreigners pay taxes to sell us stuff so that we can cut the taxes we charge ourselves. I like this idea so much that I want to expand it.
Let’s start right here is Silver City. We need money for better roads and utilities and to pay for our new recreation center. The way to get it is to charge tariffs on foreigners — starting with the ones from Bayard.
Let’s put a 15 percent tariff on Bayard. Their products would be charged when they enter Silver City. What does Bayard produce that would be subject to the tax? Tortillas. Mi Ranchito Foods is in Bayard, and its products are available in Silver City grocery stores. The idea is not only to collect more taxes, but to encourage companies to make tortillas in Silver City instead of Bayard.
Great! Free money for Silver City from Bayard. Except it’s not from Bayard; it’s from Mi Ranchito. But the owners may not agree to less profit. They might just raise the price to Silver City stores.
If the price of Bayard tortillas goes up, people can choose to buy what they like for more, or they can switch to other brands. For example, some stores in Silver City sell La Bonita tortillas. Great, this must be the local La Bonita bakery. But if you look at the package it says: “Packed by La Bonita Mexican Food Products” in Las Cruces. Well, I guess we’ll also have to put tariffs on Las Cruces. Except what do they mean by that phrase “packed by?” Doesn’t La Bonita make their own tortillas? Haven’t you seen those huge fields of corn near Las Cruces? No? Neither have I. Nor have I seen cornfields near Bayard.
Is the corn used to make local tortillas actually coming from Iowa or Nebraska? Or is it being shipped from Mexico?
All those questions also apply to our one remaining car dealership, Hatch Toyota Stateline, which is also Hatch Chrysler-Dodge-Jeep-Ram. I remember when Silver City had separate Ford, Chevy and Dodge dealers. Now it’s just one dealership, and their main product, Toyota, comes from Japan, which just got the same 15 percent tariffs I suggested Silver City should apply to Bayard.
So will you pay 15 percent more for your next Toyota? Not necessarily, since many Toyotas are manufactured in Kentucky, Indiana, Texas, Mississippi and Alabama.
Most Chryslers, Dodges, Jeeps and Rams are made in the United States, Canada or Mexico, but their parts (including steel) come from all over. It’s kind of like where the corn for tortillas comes from. Does the tariff apply to the finished car or to the parts it’s made from?
And we haven’t even got to reciprocal tariffs. If Silver City applies a 15 percent tariff to Bayard, what will Bayard do in response?
What does Silver City manufacture that Bayard could put tariffs on? Well, we produce a lot of Syzygy tiles. I’ve seen Syzygy products in high-end interior decorator stores in Seattle, but I don’t think many of them get to Bayard.
Perhaps this silly metaphor of local tariffs has gone far enough. I made up the Bayard tariffs to make points about national tariffs. In real life those of us who shop at Walmart can ignore Bayard and focus our concerns on China — also Mexico, Canada, Vietnam and South Korea. I don’t have to explain that most TVs, kitchenware and toys are made in China or other Asian countries.
The current tariff rate for China ads up to about 32.6 percent, down from 147.6 percent in April, but up from 8.0 percent before 2018. Who’s going to pay that 32.6 percent? China? Chinese companies? U.S. companies like Walmart? Or you and me?
The more you look at tariffs at whatever level, the more complicated and unpredictable they seem. But the confusion is about to end. We’re going to find out once and for all whether tariffs work the way President Donald Trump says they work. He will definitely, absolutely finalize all tariffs by Aug. 1. That will be tomorrow.
I look forward to the end of uncertainty (maybe), but I fear unintended consequences.
