Trump’s Border Tax: An Abyss?

Published in Beijing News
(China) on 26 January 2017
by Sun Xing Jie (link to originallink to original)
Translated from by Kartoa Chow. Edited by Christina Virkus.
A cold view of the world.

The market is already globalized, so the use of a border tax to segment the market is essentially to create a bottomless chasm, an abyss.

On his first working day after taking office, Trump not only signed an executive order to decidedly leave the Trans-Pacific Partnership, but also met and discussed with some of those in charge of big corporations, warning that either production by these multinational businesses would need to return to the United States or the government would impose a very high tariff on imports. Trump also suggested that these businessmen communicate with the states to locate suitable production sites. Of course, besides a big stick, Trump also promised a carrot—the cutting of regulations by more than 75 percent. Would the border tax ultimately wake the American economy to bring hope or would it create a barrier? In my opinion, this is just Trump digging a gulf.

The conversation with the businessmen signified that Trump’s border tax was not a joke but an actuality. His policy even earned support from the chief tax policy-maker in Congress. The idea of free trade, or at least the current policy of free trade in the U.S., has been abandoned by Trump. Trump even claimed during his inauguration speech that protection could bring about prosperity. Therefore, the border tax is not merely a scare tactic but could very likely be implemented in a short period of time.

Prior to taking office, Trump attacked many companies on Twitter, including Ford and Toyota. These companies obediently decided to produce cars in the U.S. instead of Mexico. However, there are those who are less obedient, such as Germany’s BMW. Can a border tax allow for the revival of the U.S. manufacturing industry? No one knows the answer, but Trump believes so. To revive the U.S. economy, it is necessary to buy American goods and hire American people. This is the fundamental point of Trump’s economics. Trump will do whatever benefits the realization of this goal.

Trump’s policies have encountered opposition by some importers because U.S. corporations require global purchases. Now is the era of supply chain cooperation. And as the U.S. builds a wall and shuts itself up in a dark house, something still lingers: how does one differentiate between what is American and what is foreign? The market is already globalized, so the use of a border tax to segment the market is essentially to create a bottomless chasm, an abyss. Unless the United States fully realizes the internalization of its supply chain, which is almost impossible.

Border taxes benefiting the U.S. manufacturing industry and its recovery do not only scare certain companies but also cause worries over a tariff war. Trump’s tariff wall is not, however, mainstream—it is a retreat from multilateral trade frameworks and goes against globalization—and the majority of countries are still observing Trump. If Trump's nonsense policy becomes a reality, it will essentially be a beggar-thy-neighbor policy, waiting for his own trading partners to be imperiled, or perhaps even giving them a push toward it. Win-win cooperation becomes a zero-sum game, and a tariff war is not unreasonable.

A big stick like the border tax should not be raised easily. Trump’s opponent is not necessarily the one who will ultimately turn black and blue. To a businessman, a carrot—like infrastructure investment, tax cuts, business environment improvements, etc.—is more appealing. Not only is it Trump’s trump card, but it can also realize the fundamental point of Trump’s economics. However, to achieve these ends is very difficult, and seeing results during the four-year term is even more difficult. Therefore, the border tax has become a possibly fast-acting, palliative drug, if one with a large side-effect profile.

The United States has been pursuing a type of open international economic policy since the end of World War II. Now, Trump is basically abandoning this economic policy and ignoring everyone else. However, the world is not just the United States. While Trump is carving out a chasm, others can simply make a detour.


  冷眼觀世

  市場已經全球化了,以邊境稅來切割市場的做法,本身就是個大坑。

  特朗普上台的第一個工作日不僅簽署行政令堅決地退出了TPP,還約談了一些大企業的負責人,警告這些跨國企業還是要回到美國本土進行生產,否則政府將徵收非常高的進口稅。特朗普還建議這些企業家跟各州能夠進行溝通,尋找合適的生產基地,當然,除了大棒之外,特朗普也許諾了胡蘿蔔,那就是撤銷75%以上的監管法令。邊境稅,到底會給美國經濟復甦帶來希望還是豎起了壁壘呢?在我看來,這許是特朗普挖的一個大坑。

  約談企業家,意味著特朗普的邊境稅不是說著玩的,而是要動真格的,這一政策也得到了國會中首席稅收制定者的支持。自由貿易的理念,至少是美國現行的自由貿易的政策已經被特朗普拋棄了,保護能夠帶來繁榮,特朗普居然在就職演說中如是說。因此,邊境稅絕不只是嚇唬人的把戲,極可能在短時間內就會推行。

  在上任之前,特朗普就在推特上敲打過不少企業,包括福特、豐田等,這些企業還是乖乖地決定在美國本土生產汽車而不是墨西哥。但是也有不是那麼聽話的,比如德國的寶馬。邊境稅能夠讓美國製造業重振雄風嗎?沒有人知道答案,但是特朗普將其視為信仰。要重振美國經濟,就要買美國貨、僱美國人,這也是特朗普經濟學的基本點,只要有利於實現這個目標,特朗普就會去做。

特朗普的政策也遭到了一些進口商的反對,因為美國的企業需要在全球採購,現在是生產鏈合作的時代,築起高牆,把自己關到小黑屋子,那也是藕斷絲連,怎麼可能分得清楚什麼是美國,什麼是外國呢?市場已經全球化了,以邊境稅來切割市場的做法,本身就是個大坑。除非美國完全實現了生產鏈條的國內化,而這幾乎又是不可能的。

  邊境稅可能會嚇到一些企業,有利於美國製造業的恢復,但是也會帶來關稅戰的隱憂。特朗普關稅的高牆是非主流的,從多邊貿易框架中撤退,都是逆全球化的,多數國家還在觀望特朗普。如果特朗普的“鬼話”變成了現實的政策,就是以鄰為壑,等著自己的貿易夥伴跳下去,或者推下去。雙贏的合作變成了零和博弈,關稅大戰不是沒有可能的。

  邊境稅這樣的大棒還是不要輕易舉起,最後鼻青臉腫的不一定就是特朗普的對手。胡蘿蔔對企業家的誘惑力會更大,包括基礎設施的投資、減稅以及營商環境的改善等等,這些才是特朗普的殺手鐧,也是實現特朗普經濟學目標的基礎。只不過,要做到這些,很難;在四年任期內見到效果,更難。如此看來,邊境稅就變成了可能的速效藥,但治標不治本,吃多了,副作用也大。

  對美國來說,自二戰結束以來,一直奉行一種開放的國際經濟政策。現在特朗普基本放棄了這一經濟政策,想要躲進小樓成一統,只不過,世界已經不是美國一家的了,東邊不亮西邊亮,既然特朗普挖大坑,那還是繞道而行吧。
This post appeared on the front page as a direct link to the original article with the above link .

Hot this week

Canada: Elbows Down on the Digital Services Tax

China: US Chip Restrictions Backfiring

Pakistan: American Jingoism Hurts Americans

Switzerland: Ukraine Is No Longer a Priority for America: Trump Leaves the Country High and Dry

Thailand: US-China Trade Truce Didn’t Solve Rare Earths Riddle

Topics

Australia: Australia Is Far from Its Own Zohran Mamdani Moment. Here’s Why

Canada: How Ottawa Gift-Wrapped our Dairy Sector for Trump

Canada: New York Swoons over an American Justin Trudeau

Germany: Europe Bending the Knee to Trump

Germany: NATO Secretary General Showers Trump with Praise: It Seems Rutte Wanted To Keep the Emperor Happy

China: US Chip Restrictions Backfiring

China: US Visa Policy Policing Students

Pakistan: American Jingoism Hurts Americans

Related Articles

Canada: How Ottawa Gift-Wrapped our Dairy Sector for Trump

Germany: Europe Bending the Knee to Trump

Germany: NATO Secretary General Showers Trump with Praise: It Seems Rutte Wanted To Keep the Emperor Happy

China: US Chip Restrictions Backfiring

China: US Visa Policy Policing Students