- - Monday, September 9, 2019

ANALYSIS/OPINION:

Many are concerned that a significant tariff on all Chinese goods, 30%, for instance, would negatively affect U.S. consumption. Here is a solution, which could be called the “Chinese Tariff Dividend”: A 30 percent tariff would annually collect $150 billion on $500 billion of Chinese imports, generating $600 per U.S. adult ($1,200 per married couple) annually. Congress should legalize the distribution of the “Chinese Tariff Dividend” to all adult U.S. residents. This payment would be very simple to administer as a credit on tax returns.

The distribution would amply address concerns about possible price increases and concomitant weakening of U.S. consumption. Furthermore, it would serve to quiet the tariff naysayers who all too easily ignore the paramount end goals of the tariff policy: eliminating Chinese intellectual-property theft, stopping forced technology transfer for market access, and reducing the huge trade deficit with China. These same naysayers also miss the obvious — namely, that the tariff revenue at present is a windfall to the U.S. Treasury, which would create the “Chinese Tariff Dividend” opportunity in the first place. To put it another way, the debate always seems to be “Who pays the tariff?” But it could just as easily be “Who gets it?”

Both countries’ economic participants share the burden of a given tariff, but given the significant bilateral trade asymmetry (four U.S. imports to one Chinese import), coupled with very legitimate U.S. trade grievances, the situation is tailor-made for a U.S. initiated trade war, in which the United States stands to benefit greatly. The proposed “Chinese Tariff Dividend” is a fitting remedy which would more than compensate the consumer for any higher prices paid, and thus, be a big political win to boot.

PAUL MATTEN

Naples, Fla.



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