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Tariff rates are a function of currency flows, and since this chart doesn't even bother to mention certain happenings in 1944 or 1971, then we can conclude the creator is retarded.
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What happened back in '44 or '71?
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Bretton Woods and end of gold convertibility
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I don't think those events are what the author's getting at on this graph. Check it out, it's only events straight-up related to tariff laws. Like, what's the deal with the gold standard and tariffs?
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Tariff rates are a function of currency flows
Those events shaped global currency flows, first by making the dollar the world reserve currency, and then making the dollar currency fiat.
Therefore, the same tariff before and after those events its not effectively the same tariff, the flows are different. This is why Trump et al mention currency manipulation and other "non-tariff barriers" that effect these flows.
Say you're an importer of junk from China, and that junk typically costs $100... but then a new 25% tariff gets added, your cost is now $125 or so you would you would think... but no... because $100 price isn't fixed in your currency, it's impacted by the exchange rate of Chinas currency... the same Chinese currency that had its flows reduced by the tariff making it less valuable in dollar terms.
That $100 junk with 25% tariff might become $75 dollar junk with a 25% tariff, actually lowering your cost.
In this example we see the dollar breaking out against the Vietnamese Dong since Vietnam's currency relies on the importing of dollars and those dollar imports just became more expensive. This is why they say the other country picks up the tab, and why all the people bitching about tariffs seem to have no issue with countries having tariffs on the US.
So, a tariff chart showing dollar-based percentages is meaningless, given the Y axis lacks a common denominator.
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Hahaha
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Back to the past
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