Updated: Jun 18, 2021
If like me, our friends across the pond enjoy a wee dram of Scotch whisky then they will be pleased that tariffs, which were placed on our exports to the United States have been removed and would suggest that prices for our American cousins will drop and more importantly for our manufacturers the cost of export will drop. Good news for jobs in the sector.
"Let's compete freely, Goddam tariffs! Free trade and free seas - that's what's right!"
A tariff is a tax imposed by a government of a country or of a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry. Wikipedia.
A tax imposed by a government are the important words in the definition above. The imposed tax is to boost the revenue for the government and is supposed to protect the manufacturers in the importing nation. In the short term this maybe the case as the as high tariffs will normally reduce the importation of a product as prices remain high on that product and obviously a higher price for the customer. This in turn will then supposedly protect the importing nations industry, in other words protectionism.
Many countries will slap tariffs on goods to protect a domestic ageing inefficient industry.
There are many of us who believe that this method, in fact has the opposite affect and will in the long term cause problems in the importing nation. Tariffs have been reducing worldwide but are still in use. The whiskey tariff was introduce by the Trump administration in the bid to rebuild industry and "make America great again."
The reduction and/or a move to zero % tariffs, we believe will increase growth and have a price reducing effect. I have to agree with the statement below:
"Opponents of tariffs argue that tariffs hurt both (or all) countries involved, those that impose the tariff and those whose products are the target of the tariffs. For the country whose products are the target of tariffs, costs of production and sale prices rise and for most this leads to fewer exports and fewer sales. A decline in business leads to fewer jobs and spreads the slowdown in economic activity." *
* Extract from the Tariff Inc website.
In the current climate that the world finds itself in, it is my belief that all nations should move at pace to a zero tariff policy on all imports as another way to increase consumer choice which will increase retail sales, make production costs lower and increase competition. There is an upside also as when products have tariffs place on them there will certainly be those who will look to the black market to supply demand.
A libertarian government will seek good diplomatic relations and trade with all nations. We support the CANZUK initiative that promotes free trade and reciprocal free movement of people between the these four nations who share common law history and the maturity of their democracies.
We also believe in a "Trade not aid" policy where we should be trading with poorer countries which will kick star their economies and help them to stand up on their own. We would do away with the 0.7% in foreign aid which never gets to the people it is really meant for, but of course we will always help in natural disasters and when humanitarian aid is needed.
We therefore will have unilateral free trade as it is a misconception that free trade deals need to be struck. On the contrary, a Libertarian government will ensure that we trade freely unilaterally. The benefit of this policy will maximise economic growth with disproportionate benefit to those most poor.
Glenville Gogerly EADW - Libertarian Party Chairman, International Trade & Home Affairs Spokesperson.