A Case for Free Trade
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by St Krems
When we allow imports into our country we are harming American business, right? We are taking away jobs from American workers and giving them to those hippie PEACE ba#&*$terds on the other side of the world. Why the hell is Krems trying to make a case for this?
Well I’m not denying that imports will have a negative impact on some of the eUS's industries in the short run. However, tariffs are a tax. Like it or not they are a tax by the government on imports, and its not the company trying to import the product that pays the tax, it’s you, the consumer who has to pay it for every import you buy. What would be your reaction if the government announced 28% VAT on food? Well that’s the amount of tax you pay to buy imported food, why should your anger be any less?
The main reasoning behind tariffs (or import taxes as they are called in this game) is that they protect eAmerican industry. This is a shield that the government always hides behind every time this issue comes up. The only industries that tariffs protect are those that are incapable of competing with their foreign rivals on a level playing field. Yes I’m talking about those companies that are cited in medium resource areas or are poorly managed. Why should you pay a tax to support those companies? Fair competition and hard work are the American way, not hiding behind tax barriers hoping that those more productive foreign firms never find a way to provide you're customers with cheaper goods.
How does it look to our allies when the eUS, supposedly a bastion of eCapitalism and defender of developing countries, erects trade barriers against their goods? And why should they, in return lower their tariffs? Instead shouldn't we be negotiating with them for a universal lowering of tariff walls? With no tariffs it could be eUS firms who undercut the foreign competition, offering us new markets for our goods. As I said at the beginning, those firms who were not competitive enough to compete would die off but surely we all have enough faith in our nation to see this as a possibility for them to be replaced by new competitive firms and not as a threat to our country.
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I agree with your goal of free trade, however I have come to learn RL economics don't really apply in eRepublik. Unless eRomania and our other ATLANTIS allies lower import tariffs in concert, the eUSA might as well remain protective. Good writing though!
our import taxes are well below the other top five countries, which average about 90%. The pressure should be on the allies not on eUS to lower import taxes.
@Alexander: We remain protective, but only at the expense of the consumer. Oh and Thanks 🙂
@Carr: Yes but the eUS should do more to set the example and also should start to apply serious pressure to our allies to lower their tariffs.
@St Krems
You say, "we remain protective, but only at the expense of the consumer"
While in the short run this may be true, in the long run 0% import taxes will only cripple the economy.
US companies will be forced to compete with the low prices, or sell even less product than they already do. The primary way to do this will be to lower wages in the manufacturing sector, at least until cheaper resources become available (which will, in turn, drive down the wages for raw products production). Other players are paying your wages, trying to get ahead just like you. We all know what lower wages will mean, so I wont belabor the point.
Many people are already lamenting over the inability of business owners to sell business, sometimes at a 50% loss! This is because in many cases the markets are over-saturated with product with not enough people buying (yes, even food/grain markets). So, businesses will die, and everyone will move overseas with the last of their cash in order to do the things that make eLife possible. Ultimately it will be impossible to start an eLife in USA, UNLESS, as Alexander said, our allies (at least) lower their import taxes.
Access to cheaper (non-domestic) product is false economy. Perhaps we need to evaluate the need for a higher minimum wage, or price caps for certain products, but eliminating tariffs will do nothing to help the average eUSA citizen.
sorry, I think you missed read some of my article. Please go back and give it a look over.
Lower import taxes are a great from a consumers point of view, but this game, unlike real life, isn't based on commodity consumption. You only need food to survive in eRepublic, not shelter or clothing or transportation or education or health care.
eRepublik is focused on labor and capital, not commodity consumption. Import taxes protect business owners and workers, which makes the eUSA a stronger nation.
Further, economies of scale don't work in eRepublik. Max productivity for a company is set at a predetermined number of workers. Highly efficient companies are unable to expand production as they do in real life. If the eUSA only supports our most efficient companies by reducing import tariffs, we will be unable to provide full employment to our citizens.
Not true, expansion merely comes in the form of investment into a new company. If a GM can mangae one company succesfully then it stands to reason they can manage two.
I really Love your article and your thinking... I agree that the lowering of taxes will increase IN REAL terms the welfare of an eCitizen... however! I won't agree with this policy when US and Romania are at war with PEACE. I think the real objective right now is HOW to get MORE people in our countries...
I believe that ppl don't calculate a LOT what would be their REAL income, they look at their Nominal income in gold (even if in that country you can't buy anything with that gold).
I would STRONGLY favor however a 0 Import tax between our allies (Like creating a Customs Union) in this way we will be fostering efficient investment between our countries and alleviate the wages between sectors ...
forgot to say: Voted + Subscribed! 😁