Tuesday, April 9, 2013

How World Trade Works: Chicken Tax

I got to work as a teamster one summer driving Datsuns off the docks to be processed as imports.  Longshoremen went onto the ships to drive the cars off the ships, then the teamsters got in and drove the cars the rest of the way to the processing lots.

I got called on a Friday to report to work on a Monday.  Problem was, I never had driven a stick shift before.  So I toured the Datsun (Nissan) dealers as a customer and test drove cars.  I pity the poor fool who bought the car I test drove.

Light trucks were driven to a place where the beds were installed, for light trucks came in at 25% duty, but not light trucks were 4% duty.  No bed and they are not light trucks.

Ford imports its best selling truck with windows to beat the truck tax.  Then they replace the windows in USA with metal panels to become the truck people want to buy.  The glass windows are shredded and discarded.  Sigh.  What waste.  There is much more here.

Retaliatory duties make for trade wars.  It leads to madness.  The proper response to ill-action on the part of trading partners is nothing.  Unilateral free trade, as we see in history and in practice today, beats all predatory action.  Would that policy minders understood this.  But then we'd need no policy minders.

And the prices on everything would go down.   I developed a love for stick-shift cars, and regretted there was no stick-shift Caddy when I was in the market.  But they now have a CTS with a six-speed short-throw for 2013. The model I want is $65K, so I'll wait five years and get is for $21K.  I don't buy new cars.  In a free market that car would be probably $6500, not $64K.  Prices would drop, like in the freer computer markets. Then I'd buy new.

Feel free to forward this by email to three of your friends.


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