what is the incentive to add tariffs other than collecting more revenue for the US government

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what is the incentive to add tariffs other than collecting more revenue for the US government

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Asked on February 2, 2025 1:48 pm
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Tariffs are largely utilized to encourage domestic production and increase investments in your own country. If we use a simple example of softwood lumber, if the US adds a 25% tariff to the lumber, it would make every $1 of Canadian softwood costs $1.25. In turn, this likely makes US companies who are buying lumber, whether it be for residential construction or any other use case, buy from US producers as the tariff is not implemented.

There could also be an added use case for the United States in the situation if the US government can collect enough tariffs from companies exporting goods to the US that they could lower taxes for consumers.

In Trump's case, it is really unknown as to what he is implementing them for. He has said on a surface level it is because of a trade deficit and lack of border control from Mexico and the US, but I personally think this is just a convenient excuse for him to implement them for other underlying reasons.

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Posted by Dan Kent
Answered on February 2, 2025 6:18 pm