How the US can generate revenue from China by imposing tariffs

  The US can generate revenue to the US government from the Chinese economic system by imposing tariffs specifically on  Chinese goods imported from China, by a Chinese importer, into the US. Here is a general explanation of how tariffs work in this context.

When the US imposes a tariff on Chinese goods imported from China by a Chinese importer, the responsibility for paying this tariff falls on the Chinese importer at the point of entry into the US. Typically, the importer is a US-based company that purchases goods from China. However, if a Chinese company is acting as the importer of record (meaning they are directly responsible for bringing the Chinese goods into the US), that Chinese company would be required to pay the tariff to the US government upon entry of the Chinese goods into the US.

The tariff is calculated as a percentage of the value of the imported Chinese goods. For example, if the tariff is set at 10% and the value of the imported Chinese goods is $100,000, the Chinese importer would pay $10,000 in tariffs to the US government. This payment is made at the border before the goods can be cleared for distribution in the US market.

This tariff system allows the US government to collect revenue from the Chinese economic system by means of the tariffs imposed on imported goods from China. However, it's important to note that, in the long run, the ultimate economic burden of the tariff may still fall on US consumers, as importers often pass the additional costs onto consumers through higher prices for the goods [1][2]. But on the other hand, higher prices of Chinese goods in the US will make similar American goods, made in the US, more competitive. American companies that are able to become more competitive will end up paying higher taxes to the US government.

In essence, while the tariff revenue to the US government that comes from the Chinese economic system is collected from the Chinese importer, the broader economic impact is shared across the supply chain, affecting pricing and market dynamics. This approach is a way for the US to generate more revenue to the US government, from imported goods,, regardless of the importer's nationality [1][2].

Sources

1 Free to Choose by Milton Friedman and Rose Friedman

2 Classical Economics by Murry Rothbard