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Tariffs , volume and productivity


scorpioncapital
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Suppose China puts a 10 percent tariff on productivity enhancing goods . Should we expect the chinese buyers to make up for the tax via equivalent increase in volume sales to those companies that didn't maximize their efficiency? Or is the tax likely to not offset by trying to lower costs because you can't go any further? At 25 percent seems high but at 10 percent maybe no effect?

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