Tariffs are usually used to protect domestic industries from more efficient foreign competitors. But domestic firms also buy inputs, raw materials, supplies, parts and inventory FROM foreign producers, and in fact more than half of U.S. imports are industrial supplies and parts, and NOT finished consumer goods. In that case, tariffs are a tax on the inputs of domestic businesses and can put them at a significant competitive disadvantage.
Case in point: There is a punitive tariff of up to 17.2% on an imported specific micro-denier suede fabric used extensively by Mississippi furniture manufacturers Lane, Bauhaus, and H.M. Richards. This tariff is about to be removed, saving each of these three firms more than $1 million annually, and saving close to 1,000 jobs in NE Mississippi.
Read about it here, here and here.
HT: Taxinging Tennessee
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