Consumers will pay

Produce is about to become more expensive -- from taxes.In the late 1960s, I was aware that some very expensive, at legitimate U.S. market prices, flight training books were available for almost nothing from China. The books had been copied and reproduced in violation of copyright laws. A few guys had bought the books, and it was obvious they were cheap copies, not the professionally printed versions that were legitimately produced and sold by Jeppesen, a world leader in flight instruction manuals and books.

Because the books were essentially stolen, military members were strongly discouraged from buying them. Alas, some were not discouraged enough.

In 2009, the Obama administration approved a $535 million in loans to the solar panel manufacturer.

In 2011, the company declared bankruptcy and closed, leaving U.S. taxpayers on the hook for $535 million in defaulted loans.

In response, anti-Obama folks blamed him for the bad loan. What was often omitted from the story was that China had flooded our market with cheap panels. One can argue about whether Solyndra and Obama should have seen that coming, but what is certain is that China has a system of government that allows using cheap, state-owned factories and workers to sell products for less than they spend to make them.

In another instance, a Chinese company found a way to establish an address in the Cayman Islands, thereby becoming eligible for listing on the New York Stock Exchange. The company attracted several million dollars of investors’ money, declared bankruptcy, and went home with the money.

Clearly, China has been cheating, though we have abetted.

But I think the right response is not to enter a tariff war in which our farmers lose their market, and We the People will pay them $15 billion for product they are not selling to China. (Axios.com reports we already have paid farmers $8.52 million.) As an Adams County soybean farmer told me last year, if China responds to the trade war by purchasing soybeans from Brazil, that is a loss for American growers. Once the new source is developed, there likely will be no reason for China to come back to the U.S. for the product.

If my wife shopped at Grocery A because she liked the products and prices, then the grocery closed its doors or significantly raised its prices, my spouse would look for another market.

If she found a supplier she liked, and then Grocery A reopened, she probably would not go back. 

Wannabe aviators bought the illegal flight training manuals. Construction companies bought the underpriced solar panels. Investors invested in the sham companies.

China has been playing by different rules for decades. Charging the American taxpayers for China’s malfeasance seems an odd way to correct the problem. But the value of a product is an agreement between buyer and seller, and we agreed.

And now that President Trump has levied additional tariffs on Chinese goods coming to this country, American consumers get another whammy. Whether those tariffs are paid by Chinese shippers or U.S. importers, the cost
ultimately will be paid by American consumers.

Businesses are in business to earn profits. That means that all costs of production and shipping, including taxes and tariffs (actually a tax by another spelling), are passed to the consumer. Companies do not pay taxes or tariffs. They pay lawyers and accountants to fill out the forms, then pass even those costs to the consumers. It makes sense.

It also means China is not paying for the tariffs on machinery, dog food, carrots and other processed produce they are sending here.

There has to be a better way to balance the scales.

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