What are your thoughts on tarrifs?

Generally, don't use them if you can possibly avoid it. Think of them as kinda like minting in EU3 - if you desperately, desperately need the cash, then it's worth it in the short term, but tariffs will cause you long-term trouble.

It is always, always better to get the money from direct taxes if you can.

I share the doubts of Hardcore gamer, here. The issue with victoria is that the tooltips are not as helpful as in other PI game. There is no information at all on the effect of tarriffs.

What I got from i experimentations is that it can be very useful for uncivilized countries to have some good amount of cash easily to finance education or administration early on.

The reason Naselus, and others will mention that is because tariffs don't work in game as they would in real life because of the way pops, and your factories, which are also taxed by tariffs, buy the products they need.

For an uncivilised country I'd guess tariffs are probably ok, but they act as a direct tax on factories if they import any of their inputs, which will potentially ruin the profitably of those factories. What tariffs don't do, as they would in real life, is stimulate people within your own country to start making more of those resources that you import to cover the shortfall

Hardcore_gamer said:

The problem I have with this claim is that I have heard a lot of people talk about how "you should ONLY do X or Y" and that it is the only "correct way of playing". The problem is that a lot of those people actually state different things about which things are the "correct smart things".

Victoria 2 is an open ended economic game, so I don't buy the idea of tarrifs not serving any purpose in the game or else there would have been no point in including it. Perhaps tarrifs don't make sense in your play styles, but that doesn't mean that they don't in somebody else's.

So what I want to know is what role tarrifs serve in the MANY DIFFERENT play styles that are possible in Victoria 2.

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OK, let's break it down some.

In V2, tariffs act as a form of VAT on any imported goods, regardless of type. So if you have a 5% tariff, then all imported goods will cost 5% more in your nation, regardless of the buyer.

Now, this is fine for the population. If you have a 20% effective tax, then pushing up tariffs will allow you to get at more of your population's money; hence, it's a handy source of revenue.

HOWEVER, the 5% increase in the price of goods also effects factory inputs and artisan inputs. That hits profit margins pretty hard; and if you have factories which are already struggling, then suddenly charging them 5% for all inputs without any corresponding increase in output prices will likely result in factory bankruptcies. Artisans are doubly weak for this, since they're basically idiots, and factories which have recently opened, too. Increasing tariffs even a tiny bit will tend to cause Artisans to all immediately go into the red, which can take them months to get out of. Uncivs will also generally suffer from tariffs over time, since it causes Artisans to go bankrupt and drop out of the middle class altogether (and Artisans can be VERY lucrative for uncivs, if you have a bit of prestige).

So, tariffs hurt industry, but allow you to get at another slice of the population's cash (which hurts demand, and so hurts industry again). So generally speaking, don't use them - taxes don't directly hurt industry at all, and only hurt demand a little.

Joe32320 said:

What tariffs don't do, as they would in real life, is stimulate people within your own country to start making more of those resources that you import to cover the shortfall

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Which is not necesserary true, because price is not the only issue here. Take China today, huge tariffs on foreign products, but still many people buy overpriced german cars (or american toothpaste, japanese clothes, etc.), because the chinese ones can't compare.
As for natural resources, you could tarriff the heck out of petrol in France, they won't suddenly find deposits under their country.
The case in which tariffs boost local productions are exceptions for easily substituable products, but is far to be a common rule.

Increasing tariffs even a tiny bit will tend to cause Artisans to all immediately go into the red,

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OOooh that was why it happened ! Silly me :unsure:

Darkath said:

Which is not necesserary true, because price is not the only issue here. Take China today, huge tariffs on foreign products, but still many people buy overpriced german cars (or american toothpaste, japanese clothes, etc.), because the chinese ones can't compare.
As for natural resources, you could tarriff the heck out of petrol in France, they won't suddenly find deposits under their country.
The case in which tariffs boost local productions are exceptions for easily substituable products, but is far to be a common rule.

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True, but if the reason for the tariff isn't for the revenue itself, then it's usually to protect/grow a domestic industry...usually.

Darkath said:

Which is not necesserary true, because price is not the only issue here. Take China today, huge tariffs on foreign products, but still many people buy overpriced german cars (or american toothpaste, japanese clothes, etc.), because the chinese ones can't compare.
As for natural resources, you could tarriff the heck out of petrol in France, they won't suddenly find deposits under their country.
The case in which tariffs boost local productions are exceptions for easily substituable products, but is far to be a common rule.

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Point is, your POPs always buy your products first, so tariffs are immediately redundant, their purpose (protecting local industry) disappears, unlike in real life. Second point is, all products cost the same, so your market can't be drowned in cheap Chinese products, unlike in real life. Prices do fluctuate, but they do so globally, so your pops always pay the same price for an automobile, regardless if it was made in UK, USA, Austria...

Therefore, tariffs are really redundant feature. They don't have their true purpose and they should be looked on as another source of tax, but one that can potentially hurt your industry.

I just pointed that out to say the argument "as it does in real life" was kinda pointless because it doesn't exactly work like this IRL. You can't expect tariffs to have realistic effect when the economy is as much simplified as in V2. Because Supply and Demand are solely based on price on V2 (goods does not have varying quality, subjective value etc.), tariffs as shields for your industry would be way too much efficient compared to what you could expect IRL.

The negative effects of tariffs are severaly blown out of proportion. I've invariably had positive tariffs at various points in any of my Vicky 2 games and it saved my financial hide more than anything else.

One needs to be sensible with it of course, putting it at 80% at the start of a game and leaving it there will kill your economy for sure. Increase & decrease it to the right degree at the right time however and it becomes a powerful economic tool.

The 'NEVER TOUCH THAT SLIDER' doomsday talk is nonsense.

OK, let's break it down some.n V2, tariffs act as a form of VAT on any imported goods, regardless of type. So if you have a 5% tariff, then all imported goods will cost 5% more in your nation, regardless of the buyer.Now, this is fine for the population. If you have a 20% effective tax, then pushing up tariffs will allow you to get at more of your population's money; hence, it's a handy source of revenueHOWEVER, the 5% increase in the price of goods also effects factory inputs and artisan inputs. That hits profit margins pretty hard; and if you have factories which are already struggling, then suddenly charging them 5% for all inputs without any corresponding increase in output prices will likely result in factory bankruptcies. Artisans are doubly weak for this, since they're basically idiots, and factories which have recently opened, too. Increasing tariffs even a tiny bit will tend to cause Artisans to all immediately go into the red, which can take them months to get out of. Uncivs will also generally suffer from tariffs over time, since it causes Artisans to go bankrupt and drop out of the middle class altogether (and Artisans can be VERY lucrative for uncivs, if you have a bit of prestige).Point is, your POPs always buy your products first, so tariffs are immediately redundant, their purpose (protecting local industry) disappears, unlike in real life. Second point is, all products cost the same, so your market can't be drowned in cheap Chinese products, unlike in real life. Prices do fluctuate, but they do so globally, so your pops always pay the same price for an automobile, regardless if it was made in UK, USA, Austria...Therefore, tariffs are really redundant feature. They don't have their true purpose and they should be looked on as another source of tax, but one that can potentially hurt your industry.

So, tariffs hurt industry, but allow you to get at another slice of the population's cash (which hurts demand, and so hurts industry again). So generally speaking, don't use them - taxes don't directly hurt industry at all, and only hurt demand a little.
I just pointed that out to say the argument "as it does in real life" was kinda pointless because it doesn't exactly work like this IRL. You can't expect tariffs to have realistic effect when the economy is as much simplified as in V2. Because Supply and Demand are solely based on price on V2 (goods does not have varying quality, subjective value etc.), tariffs as shields for your industry would be way too much efficient compared to what you could expect IRL.

Is this a new kind of copyspamta ? Where is the affiliate link ?

Tourmaline said:

The negative effects of tariffs are severaly blown out of proportion. I've invariably had positive tariffs at various points in any of my Vicky 2 games and it saved my financial hide more than anything else.

One needs to be sensible with it of course, putting it at 80% at the start of a game and leaving it there will kill your economy for sure. Increase & decrease it to the right degree at the right time however and it becomes a powerful economic tool.

The 'NEVER TOUCH THAT SLIDER' doomsday talk is nonsense.

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Hardcore_gamer said:

Judging from the things you guys have said it sounds like the "tarrif" is actually more of a sales tax rather then an actual tarrif.



Yea this is what my impressions have been with some of the things people have said about the tarrifs. I wonder if they suffer from some kind of a free trade bias hmy:

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Hey, it's your game, you decide how you wanna play it, in the end. Moderate tariffs won't kill your industry, but it will make it less efficient. Also, you have to keep in mind that the effect of tariffs isn't the same with every country. If you play Russia or UK, where you produce locally 80% or more of your needs, even 90% tariffs won't kill your industry. Likewise if you have a huge sphere, as sphere goods count as local. If you play small to medium sized country with no sphere, even 10% tariffs can ruin your economy. If you're a huge importer of coal, a small change in price can have devastating effects, as entire factory chains could go out of business. If you set your tariffs at 20% at the beginning, it won't make it impossible to industrialize, but your industry will be 20% less efficient overall. Actually, not overall, only those goods that you don't produce locally. To truly get how devastating tariffs can be, one should play to mid-late game and enact tariffs with a smallish country which imports a lot from WM. Then you will see how your factories start closing after a few months, and how you industry score plummets.

In the end, V2 isn't EUIII where you can't have enough money. As the game goes on, you should be decreasing the amount of money you take from your pops. More money they have, the more they buy, thus increasing demand. With only a few techs, you can get your tax efficiency so high that you won't have a shortage of money. So, it's not the question of "OMG, don't enact tariffs, it's the end of the world!!!", it's more of a question of "what do you stand to gain?" and the answer is nothing, unless you're really strapped for cash and need a short term boost. Besides that, you never stand to gain anything, it's only a question of how much you will lose. Depending on the size of your country, your rgo's, your industry chains etc... you may only barely feel negative consequences or it may run your economy into the ground, literally.

Tariffs hurt factories and artisans when they have to import their raw materials, which is the reason a lot of people are livid against their use. However, when you're a poor nation they can be a good way of keeping your economy in the green without having to slash services (education, administration, soldier salaries). Especially if you're at war and are in great need of short-term revenue to cover the costs. It all has to do with your priorities, which can be very country-specific. If you can gain enough money from taxes, are industrializing, and don't have lots of resources/spherelings, it is often a good idea to have negative tariffs (trade subsidies) to make it easier on your factories.

Darkath said:

Is this a new kind of copyspamta ? Where is the affiliate link ?

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At least it doesn't say "kil rusians"

Selzro said:

Tariffs hurt factories and artisans when they have to import their raw materials, which is the reason a lot of people are livid against their use. However, when you're a poor nation they can be a good way of keeping your economy in the green without having to slash services (education, administration, soldier salaries). Especially if you're at war and are in great need of short-term revenue to cover the costs. It all has to do with your priorities, which can be very country-specific. If you can gain enough money from taxes, are industrializing, and don't have lots of resources/spherelings, it is often a good idea to have negative tariffs (trade subsidies) to make it easier on your factories.

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There is truth in both sides of the arguments; tarrifs can be devastating to your industry if you do not produce the necessary inputs in your sphere or own nation, but can be useful to cover the costs of lots of clergy or crats if you are trying to pump up literacy or improve crat efficiency.

I would like to add a few thoughts about tarrifs that I've had. First, tarrifs can help keep cash within your nation and not flowing to other nations. Every pound or dollar that leaves my country via imports means that my pops are essentially helping other nations by buying their goods and driving that country's industry, which may not be in my best interest with certain products; I understand that this cannot be avoided completely, but the idea is to strike a good balance with the goal of securing such necessary resources for my own nation. Second, I would like to point out that you can effectively make certain goods exempt from your tarrifs by setting up a buy order and checking the box that allows pops to buy from your stockpile; coal, cement, and other essential factory goods are excellent examples of what I'm referring to.

tbuffalo said:

There is truth in both sides of the arguments; tarrifs can be devastating to your industry if you do not produce the necessary inputs in your sphere or own nation, but can be useful to cover the costs of lots of clergy or crats if you are trying to pump up literacy or improve crat efficiency.

I would like to add a few thoughts about tarrifs that I've had. First, tarrifs can help keep cash within your nation and not flowing to other nations. Every pound or dollar that leaves my country via imports means that my pops are essentially helping other nations by buying their goods and driving that country's industry, which may not be in my best interest with certain products; I understand that this cannot be avoided completely, but the idea is to strike a good balance with the goal of securing such necessary resources for my own nation.

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Ish. Problem is, good are bought hierarchically - so if your POPs are spending 5% more on importing grain or fish for their life needs, they have less money to spend buying your locally-produced manufactures for their everyday needs - so you're cutting down your home market for the goods factories are selling at exactly the time that you're increasing the cost of making them. Again, this isn't so bad for uncivs; they have no factories (or '2 or less', anyway), and tend to rely on RGO income and laughable TE. But it still hurts the Artisans to an extreme level, which can painfully impact on the largest source of potential Capitalists you have available when you hit the civ button.

Tariffs can be used successfully, but it's kind of an advanced tactic and is painfully specific in the circumstances that it's a good move. Every other source of revenue is better, since they don't impact on production - and the time you're most likely to need to use tariffs for revenue purposes is in the early game, when you don't have many clerks or efficiency techs, so they cause the most damage to your industry (and so your long-term growth, and place in the buying order). Basically, it boils down to 'use them if you must, but tariffs hurt you a lot more than basic taxation will'.

I actually tend to cut spending rather than raise tariffs, tbh; since the slider POPs all compete with one another, if I particularly want one type (say, crats, to cut my outgoings), then I'll spend 100% on admin, cut clergy to 50% and military to whatever else I can afford. My crats will increase faster for it, I'm saving money, and all I'm really losing out on is a couple of 0.0001% lit gain. It only takes a few years of that to get to full admin, when I can drop admin spending to 50% and turn up the clergy.


That said, I have played in MP games where co-ordinated tariffs have been used to decimate opponents, however. Having Russia, the UK and Austria or France all suddenly raise a big tariff can shatter industries in other powers in the early game; it also tends to retard industry globally by quite a bit, including your own. You can effectively bankrupt some opponents, but only if you're collaborating with 2-3 of the biggest, nastiest GPs around already and are also willing to trade some of your own future prosperity just to be a dick to countries half your size - and really, if you wanted to screw the game up for them that much, and had 50% of the armed forces of the world on your side already, there's better ways to do it.

Second, I would like to point out that you can effectively make certain goods exempt from your tarrifs by setting up a buy order and checking the box that allows pops to buy from your stockpile; coal, cement, and other essential factory goods are excellent examples of what I'm referring to.

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Don't use that button. Like, ever. Are we having this conversation from 2010 again?

Buy from stockpile causes all kinds of money funkiness - for example, starting with a stockpile of 0, turn it on and put grain to +2000. You POPs will be demanding the exact same amount of goods from the WM - but buying it from the stockpile - which will then also demand 2000 grain to replace it. You've just manufactured 2000 demand from nowhere, but you're not adding 2000 supply - only you can buy that grain, so it's not added into the value calculation. d=!d and price insanity follow.

Incidently, this can be great fun to watch if you just pick 5-6 primary goods, stockpile 2k, and then set 'buy from stockpile'. Or that might just say something about my idea of what makes for a good Saturday night.

Naselus said:

Don't use that button. Like, ever. Are we having this conversation from 2010 again?

Buy from stockpile causes all kinds of money funkiness - for example, starting with a stockpile of 0, turn it on and put grain to +2000. You POPs will be demanding the exact same amount of goods from the WM - but buying it from the stockpile - which will then also demand 2000 grain to replace it. You've just manufactured 2000 demand from nowhere, but you're not adding 2000 supply - only you can buy that grain, so it's not added into the value calculation. d=!d and price insanity follow.

Incidently, this can be great fun to watch if you just pick 5-6 primary goods, stockpile 2k, and then set 'buy from stockpile'. Or that might just say something about my idea of what makes for a good Saturday night.

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Just did a search about what you're referring to. I must have missed the discussion about this on the forums when it took place; I was under the impression that this would allow it to bypass your tarrifs, but the duplicated demand raising prices basically ruins the point. It's a shame you can't apply tarrifs to select goods. Even if we were able to, the use of tarrifs might still be limited; I guess it leaves me something to ponder.