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So if the main problem is over-supply then it can't be helped?

the main problem is that too less money is produced. but as said building armies with high demand, navies , doesnt matter aslong as you export more than import. Enact social reforms, except better wages (this is broken).

And support every industry . doesnt matter if a fertilizer makes even -100k each day. as long export > import
 
Pops get their goods from whichever is cheapest, so raising tariffs usually means they'll get goods from the local market. Alternately, if your country is importing a lot of goods, then lowering tariffs can make those goods cheaper, thus making your producers more effective and able to pay you more taxes...

I would like to get confirmation on this. Because I think it's not true. Afaik POPS buy inside your internal market first before moving to the WM. This has been mentioned several times in the dev diaries, manuals and the strategy guide. So I don't believe that tariffs stimulate your economy, if anything they hurt it because of more expensive input goods.
 
No. If you set import tariffs at 20% then imported goods will be 20% more expensive to buy for pops than domestically produced goods.

It doesnt change the price of the good, just what they have to pay for because of your extra tariff. The price is the same. And again, they will buy things off the local market first, thats the whole idea ^^
 
What is "price" if not "what you have to pay" for a good?
 
It doesnt change the price of the good, just what they have to pay for because of your extra tariff. The price is the same. And again, they will buy things off the local market first, thats the whole idea ^^

well, that was my point. If the prices are the same, and my people are going to buy my goods first, than tariffs wouldnt be necassary. And without currency - my fully supported industries ruined the price for steel down to about 3, cement about 10, cloth about 5 oh im the one and only producer of lumber :) will never have to fear enemy markets.

anyway closed economy is cool or better said just exports. max tariffs ftw.
 
It doesnt change the price of the good, just what they have to pay for because of your extra tariff. The price is the same. And again, they will buy things off the local market first, thats the whole idea ^^

As Gwalcmai said, the price of a good is what you have to pay for it. If you slap a 20% tariff on something the price goes up 20%.

I'm not sure about this whole "buy off the local market first" either. The manual certainly points in that direction, but the strategy guide seems to suggest otherwise. :confused:
 
I don't mean Pops in generals, Im just worried about capitalists. They have all their needs but won't build any factories, money is not a problem, so I have -21% tariffs. So if you don't care about money, and just want a high industry score, what should be done? Note Im a great power and have a large SOI
 
I'm almost positive that pops always buy from the internal market first. Isn't that the whole point of a SoI? You put other nations in your internal market so they have to buy from you. Further even with 0 tariffs (or even subsidies!) most of my production of certain goods goes to the domestic market. If you didn't buy from internal markets first you would think most of it would go to the much larger export market.

That said I'm not positive that your craftsmen/farmers don't benefit from high tariffs. Maybe they get to sell their goods at the modified value on domestic markets, pocketing the extra?

The strategy guide was written by a beta tester. It wouldn't surprise me if there are a couple errors.
 
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I'm not sure about this whole "buy off the local market first" either. The manual certainly points in that direction, but the strategy guide seems to suggest otherwise. :confused:

I'm not sure, but here is my theory:
POP buys goods A, B, and C from the internal market. It then wants to buy good D, but you don't produce it, and so it goes to the external market and buys it there.

So now you jack up the tariffs. The POP still buys goods A, B, and C without change. But now instead of buying D at a high price, the POP decides to buy E which is a local product with no tariff.

So in effect, the tariff is causing your economy to grow, since without the tarriff much of your E product may be wasted on the world market unsold.
 
I'm not sure, but here is my theory:
POP buys goods A, B, and C from the internal market. It then wants to buy good D, but you don't produce it, and so it goes to the external market and buys it there.

So now you jack up the tariffs. The POP still buys goods A, B, and C without change. But now instead of buying D at a high price, the POP decides to buy E which is a local product with no tariff.

So in effect, the tariff is causing your economy to grow, since without the tarriff much of your E product may be wasted on the world market unsold.

You might be on to something here. This sounds plausible.
 
I use tariffs, I'm running on the belief it encourages my capitalists to buy their goods domestically,...

this is something I don't understand - the tutorial several times says that the algorithm for buying a good is:
  1. see if it exists on domestic market: if so, buy it (no tariffs apply)
  2. otherwise, buy what you can afford on world market (subject to tariffs)

Now, if this is true, it doesn't matter whether tariffs are high or low, in terms of preferring domestic vs. imported goods - if anything domestic is available it will be bought, regardless of whether it's cheaper than the imported version or not.

If instead the algorithm is the simpler and more realistic:
  1. buy whatever is cheaper, whether domestic (no tariff), or imported (with tariff)

Then (a) the tutorial is wrong in several places, and (b) SOI seem much less powerful, as the whole point of an SOI is that it considers you "domestic".

enlightenment much appreciated!

Oh, and in case I get flamed for not having the manual - I've got it on pre-order from Amazon and the thing hasn't even shipped yet (where are you all getting it from?), I'm going by the demo.
 
So i did an experiment... ran for a while with minimum tax sliders, max tariffs, then reloaded and did min tax sliders, negative tariffs...

The difference: negative tariffs made my factories more profitable, so less subsidisation needed, higher income for all 3 types of people (poor,middle,rich) and tehrefor higher tax income for me from them... but the benefit of more profitable factories is vastly offset by the cost of subsidizing foreign trade... ie: with tariffs at 100%, i ended with 500,000$, less daily tax revenue per social class, but waay more from tariffs themselves... with tariffs at -25% i ended with 200,000. So if money is what you want, you are better off with max tariffs. tariffs also had no effect on population growth.

Here's the kicker though: cultural assimilation and upward mobility (POP promotion) were both much higher with tariffs set low. no brainer, right? if everything you want is cheap, then everyone can afford their needs, being able to afford >80% life and >50% luxury = promotion % boost, and cultural assimilation boost.

taxes affect how much $ your population has on hand, tariffs affect what they can buy with that cash. if you have a local supply of everything people want, maybe tariffs don't affect this stuff... boobs.

Conclusion: low tariffs will have a minor boost to both cultural assimilation and upward mobility, and both of those things will have beneficial effects on your income in the UNBELIEVABLY LONG term ( like 50 years) but the cost of keeping tariffs low is so crazy high that I really doubt it's worthwhile. 100% tariffs for the win.
 
The thing about "tariffs" in Vic2 is that, as others have already pointed out, POPs only face one price when purchasing goods. Your POPs NEVER have to choose between a domestic automobile or a foreign one. If a domestic one is available, they buy it first. Period. (Bear in mind your SOI is considered a domestic market.) If not, then they buy the foreign one whether the price is increased or decreased by a tariff. The only time the tariff makes a difference in purchasing behavior is when a POP buys something that has a tariff and then runs out of money to buy the next time. Setting high tariffs can hurt POP purchasing power if your country imports POP goods. If not, then you can't raise any significant revenue via tariffs anyway.

Ditto for factories.

This is important, because in the real world, tariffs often create a Wal-Mart moment. You see two pairs of shoes. One is domestic and costs $50. One is foreign and costs $100, thanks to a tariff. You favor the domestic product because of the price difference.

But in Vic2, POPs never make that choice. They only ever face one price at a time; and that price is decided by the WM and whether a tariff is in place or not, and whether the good is domestic or not. You POPs and factories never "shop around."

What this means is that tariffs more or less act like a sales tax compared to the income tax natures of other taxes. This means that tariffs hurt any industry that depends on any imports, but it doesn't help any industry that must compete with foreign made goods.

Clever players in this thread have already figured out that subsidizing imports can make factories more profitable, helping the economy in certain ways. I will only add that because banks never loan to capitalists or aristocrats, and because capitalists and aristocrats get so wealthy that they start filling the national banks with huge cash reserves that never make it out into the economy again, taxing the rich and subsidizing imports is the magic tool that can help the late game economy grow. High taxes on the rich (high enough that they still build factories and buy all luxury goods) can be profitably used to cut down on the costs of factories that import certain goods.

Helping the middle class and poor promote is just a handy side effect that helps everyone. :)
 
Tariffs tend to help factories/rgos that sell domestic - since the prices in the domestic market will be increased by that amount. This is espesially true for the rgos.
 
Anyway other nations will never go over 5% tariff. So they bleed out . In my game actually only GB still can export some stuff. But cause of my massive overproduction some goods prices are actually quite low. and other nations industry collapses . France / USA about 300 industrial points at about 1895 , and this are the nr.3 and 4 in the world.



Okay, how can you tell that other nations never go above 5% tariffs? How did you get that?
 
The game calculations don't properly account for tariffs. For example factories will only spend the pre tariff cost on inputs, so a factory importing all of an input good at 100% tariffs will never run at more than half capacity, no matter how profitable it is. This can be really bad for the factory if just one of its inputs is imported. Suppose it needs £1 worth of import plus £10 worth of local good to make £16 worth of product. At 100% tariffs it will spend £11 to make £8 worth of product rather than £12 to make £16 worth of product. So while you should be collecting £1 from tariff and the tax on £4 income to your industrial workers, you actually end up collecting £0.5 tariff and paying out £3 in subsidies.
 
I prefer to put tariffs as low as possible and raise the taxes a bit higher. They both serve roughly the same purpose - make the people poorer and the state richer - but tariffs are indiscriminate, while with taxes you can easily determine who pays. Which is good, because you want factories to operate cheaply and capitalists to grow rich, while you want to impoverish your poor classes to demote them to soldiers or craftsmen.
 
I prefer to put tariffs as low as possible and raise the taxes a bit higher. They both serve roughly the same purpose - make the people poorer and the state richer - but tariffs are indiscriminate, while with taxes you can easily determine who pays. Which is good, because you want factories to operate cheaply and capitalists to grow rich, while you want to impoverish your poor classes to demote them to soldiers or craftsmen.

Well, technically tariffs are not indiscriminate. They only penalize POPs who purchase items that are imported. As it so happens, most POPs buy similar goods, but certain POPs buy different goods from other POPs. (Poor POPs never buy planes, for example, while craftsmen don't buy fertilizer.)

If you are really wondering what effect tariffs have, just raise tariffs to max for a few days and see what POPs are hurt. You an at least determine what effect they are having on your POPs.
 
taxing the rich and subsidizing imports is the magic tool that can help the late game economy grow. High taxes on the rich (high enough that they still build factories and buy all luxury goods) can be profitably used to cut down on the costs of factories that import certain goods.
Ah, so that's what I've been missing! Thanks.

My observation from limited playing, and by reading AARs is that generally speaking, poor/undeveloped countries rely on higher tariffs, while richer ones can subsidize by keeping lower or negative tariffs.