Tuesday, January 12, 2021

POLITICS - Tariffs Based On Labor Input (BOLI)

The 1/11/21 WSJ articles Trade Chief Lighthizer Urges Biden to Keep Tariffs on China talks about his push for tariffs to punish China, with a side mention about protecting the American workers. The Chinese workers are definitely cheaper than the American workers. However a general blanket tariff hurts the American consumers and protects the bad American manufacturers. The DocNgu doodle is whether we can have a tariff based on the labor input. If an imported item is deemed to have say 20% of its value due to labor input, then let's put a tariff on that 20% instead of the full product. The goal is to level out the discrepant labor cost. Of the other 80% of the cost, if the Chinese can be more efficient, then good for them; the American companies have to compete better or the US government has to compete better by lowering the cost of doing business here.

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