Why can't we just tariff cheaper Asian goods to make up for the trade deficit?
Answer:
The tariff would be levied against importers and not manufacturers. In an effort to pass the increased cost on. The importers would lower the amounts purchased of such items, reducing the supply, and effectively creating an artificial shortage. In which the importers could justify charging higher prices. Meaning consumers are paying more and getting less and the revenue produced would decline because less actual items are being shipped.
Because that will only make our good more expensive overseas to other countries we are trying to sell to. We are competing globally and charging tariffs on goods will only hurt us in the global market because other countries won't be doing that.
Because there is absolutely nothing wrong with us running a trade deficit. Since there is no problem, why would you respond by penalizing Americans with tariffs?
Why not devalue the dollar instead? Administrative costs will be much lower...
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