<p>If the goal is to help domestic producers against cheaper foreign imports, increasing prices via the tariff is the point.</p>
<p>With the proposed combined price cap on imports plus tariffs, either the Chinese exporters all just eat the entire tariff, reducing their profit and keeping prices the same but giving no benefit to domestic producers (foreign imports that are too cheap to compete against remain too cheap); or some portion of Chinese producers who can no longer make sufficient profit ultimately drop out of the market to be replaced by more expensive domestic output (if they weren't more expensive, they wouldn't need help), increasing prices.</p>
<p>You could increase the cost competitiveness of domestic producers in other ways, but that would involve policies beyond those mentioned.</p>

CC BY-SA 4.0
2024-11-24T17:39:09.607Z
2024-11-24T17:39:09.607Z
ThisIsNoZaku
<p>A common push-back to President Elect Trump's proposed tariffs on Chinese imported goods is that the cost would be imposed upon domestic consumers via China raising the price of exported goods (classic Econ 101). What is stopping the US from imposing tariffs, then putting into effect a price ceiling on key goods coming from China, thus forcing Chinese producers to incur the cost of the tariffs? What comes to mind immediately is reduced production and shortages, but can China afford to lose the revenue of reduced exports to the US? Furthermore, would this not protect domestic producers while also keeping prices the same for domestic consumers?</p>

<united-states><china><tariffs><price-control>
What is stopping US tariffs in conjunction with a price ceiling?
rnty
# What is stopping US tariffs in conjunction with a price ceiling?

(Asked by: username_0 on 2024-11-14)

A common push-back to President Elect Trump's proposed tariffs on Chinese imported goods is that the cost would be imposed upon domestic consumers via China raising the price of exported goods (classic Econ 101). What is stopping the US from imposing tariffs, then putting into effect a price ceiling on key goods coming from China, thus forcing Chinese producers to incur the cost of the tariffs? What comes to mind immediately is reduced production and shortages, but can China afford to lose the revenue of reduced exports to the US? Furthermore, would this not protect domestic producers while also keeping prices the same for domestic consumers?

**Tags:** united-states, china, tariffs, price-control

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## 1 answers

### Answer by username_1 on 2024-11-24. Score: 0

If the goal is to help domestic producers against cheaper foreign imports, increasing prices via the tariff is the point.

With the proposed combined price cap on imports plus tariffs, either the Chinese exporters all just eat the entire tariff, reducing their profit and keeping prices the same but giving no benefit to domestic producers (foreign imports that are too cheap to compete against remain too cheap); or some portion of Chinese producers who can no longer make sufficient profit ultimately drop out of the market to be replaced by more expensive domestic output (if they weren't more expensive, they wouldn't need help), increasing prices.

You could increase the cost competitiveness of domestic producers in other ways, but that would involve policies beyond those mentioned.


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