alt Hacker NewsYou wouldn't have to make it in the US, or even make it at all, you would only have to pay for it there. You also wouldn't have to deliver it to the place you want the money to end up, only to the location of someone willing to pay you there. You could be paying US dollars at a bank in New York to a company based in Australia to have them deliver iron ore to a company in India willing to pay you for it in China.
I think actually Tobin tax is the wrong word sorry. I don't mean just taxing FX transactions, I mean taxing all cross-border capital flows. So yes you can do everything in dollars (and a lot of the time the dollars never need to leave New York)
But eventually you do have to pay the workers and taxes in China in yuan, and ultimately that money comes from the US consumer, making some kind of US capital account transaction inevitable?
Maybe I'm missing something but I think it does work because ultimately a current account deficit mathematicaly has to be exactly balanced with a capital account surplus. You can attack the current account side with tariffs, but it's actually more elegant to attack the capital account surplus instead