how tariffs can and should be used to regulate trade?
This is a homework for Environment class, Just need to answer question about “how tariffs can and should be used to regulate trade.” Only about 400 words, and in the end of the paragraph, write a question about this article( include your reference). this link is more about this interesting case that you can read first “http://www.thetruthaboutcars.com/2013/09/u-s-custo…“
And then, read those two reviews below and write what you think, 350 words for each of review.
1. The Tariff system has been developed in order to balance the global trade mechanisms along with the acceleration of global trading based on comparative advantage of the nations. I believe tariffs are an effective and direct way to protect nations from overtrading and also it will cause harm for domestic businesses. After reading the interesting case of “ Ford’s Importing Transit Connect As Passenger Vehicle ‘Manipulation’ of Chicken Tax Tariff “, it seems like businesses have realized that tariffs are one of their biggest concerns when they manufacture their products outside of the US. After having the tariff system around the global trading environment, companies start to look for import substitutions or tariff avoidance.
I have heard about “Tax Haven” before, tax haven is a area or a nation that offers favorable tax or other conditions to its taxpayers. I know that the most common nations or areas that are labelled as tax havens are Jersey(UK), British overseas territories, Bermuda, Luxembourg, Switzerland, etc. In the US, I have always known that most of the big corporations, such as Apple, Bank of America, Ford, Google, JPMorgan Chase, and Walmart, all like to register their business in Delaware,US. Apparently, Delaware is the companies’ favorite place to start up because they have lower tax. Does the protectionism really help balance the global trade mechanisms? Here is the article that I have found on New York Times”How Delaware Thrives as a Corporate Tax Haven”, however, it points out issues behind the tariff and the tax haven, such as smugglings, money laundering, drug traffickers, etc. In my opinion, it is hard to monitor every single trading in the world. Ultimately, businesses always have their own way to do something based on what is the best for themselves. Overall, for nations, a tariff system is a protection for its own good. On the customers’ end, tariffs may be in consideration for their decision when they purchase. I wonder if the tariff cost is different for different transportation methods such as using train vs. plane or ship vs. plane etc.? Would this push a company towards picking a more cheaper method of transporting their products vs. a more faster, convenient method?
what is your opinion:
2.Tariffs, as we discussed in class, can be a great thing or sometimes just the opposite. I think that it can be great in some cases because it can really help local economies so that we do not export too much of a needed product. Placing a tariff in retaliation to a another tax, however, can really hurt a large company like Ford Motor Company. The tax they have to pay for a truck to imported from another of their own plants is incredibly high. Having to pay an extra 25% just to bring it from one location to another can really hinder their profit margin, as well and the end user’s wallet.
I do not think Ford is trying to manipulate anything, i believe they are just trying to help their consumers as well as their own selves. They are not trying to avoid paying a tax, just trying to lower the tax amount to a reasonable rate.
It really seems like the government is just trying to squeeze a little more money out of an American company. Ford was the first automobile manufacturer in the US, so they have been around long enough to deal with setbacks such as this one. If the government is trying to deter foreign companies from exporting their products to us, then they should be focused on products that are truly foreign. The company that is being affected in a heavy way is a company that has been around for more than 100 years in this country.
what is your opinion: