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Import taxes create losers

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“We think that the trade policies of the Trump administration are very regrettable, we don’t believe that trade wars are won very easily… they only create losers,” James Watson, CEO of SolarPower Europe, told Impact4All in a video interview.

“We have written to the EU Commission to tell them to negotiate harder to get Trump to drop the 30 per cent tariff on [non-US] solar panels,” the trade body CEO said.

I love the idea of pushing for local products. However that does not mean that this is always at all cost. Generally a self-regulating market is a good thing if you have conscious consumers. Generally it mean that the informed and conscious consumer will only buy a product if it is good and worth the money. If there is something better for same or lesser cost, why would you not buy it? Trade tax muddies that equal playing field and suddenly a good product becomes far too expensive.

Trump taxes do exactly one thing: Holding back development and evolution. Tragic that this happens in a country that used to be the example for democracy and free trade.

I can see this especially here in NZ with our island economy, there are so many products available overseas that are much better than what we have and sometimes even products we do not even know about. Others are made so expensive by the chain of importers and traders. We some sometimes lack a healthy competition.

This is one of the reasons why the building sector is struggling so much in NZ. It’s easy to buy some products that are not available on Amazon or elsewhere and have it shipped to NZ. This does not easily work with building products – they are too bulky and too heavy, usually the cost of importing something is prohibitive. And then there are standards – NZ has many of their own and a good reminder to that is smoke detectors. The cool little critters, stylish and small with a long battery life – could be be officially imported because it was not tested for NZ conditions. Because we all know that fire and smoke in NZ is different from other countries. A clever national move would be to adapt good international standards instead of insisting on a national one no matter of whether it makes sense of that standard was any better.

Trade taxes are similar – it just prevents you from importing and using a good product that would otherwise advance technology in the country, make the standard of living cheaper and better, just to protect national companies financial interests.

The losers are the people, paying more for an inferior product.

Because let’s face it: Why else would you have to have taxes on a overseas product if the product taxed was not better: No one would buy it anyway.

Ingo Ratsdorf:
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