Free Trade
Posted by coaldigger 6 years, 10 months ago to Government
Donald J. Trump Tweeted:
"Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!"
I am sure he will be subjected to many "lessons in economics" by all the experts that point out that tariffs are just a tax on your own people. I agree with the principle but strongly disagree with trade agreements with individual or groups of nations that set up such barriers. The US is the prime market for almost every good and service. The government has no role in setting prices but it is almost impossible to ignore the unfair management of markets by others. I would be 100% in favor of having 0% tariff on everything imported from any country that imposed no tariff on US goods and in favor of 1000% on goods from any country that imposed tariffs on US goods. Handicapping might be a way of making golf more entertaining at the club on Saturday morning, but notice that when they play for money, everyone is 'scratch".
"Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!"
I am sure he will be subjected to many "lessons in economics" by all the experts that point out that tariffs are just a tax on your own people. I agree with the principle but strongly disagree with trade agreements with individual or groups of nations that set up such barriers. The US is the prime market for almost every good and service. The government has no role in setting prices but it is almost impossible to ignore the unfair management of markets by others. I would be 100% in favor of having 0% tariff on everything imported from any country that imposed no tariff on US goods and in favor of 1000% on goods from any country that imposed tariffs on US goods. Handicapping might be a way of making golf more entertaining at the club on Saturday morning, but notice that when they play for money, everyone is 'scratch".
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It is their country, they do not have to justify their stupidity to you.
So they have done that.
You can do the same, reciprocate by cutting your nose to spite your face. Punish your people just to demonstrate a mistaken sense of pride, some income redistribution towards a few moochers may be the real reason.
There may be a proper reason for doing it (apart from possibly setting a stance for negotiating). John Stuart Mill said tariffs can ' help infant industries'.
Does that ever work?
Yes, I would think twice before abolishing a tariff where that could happen.
To be considered- if foreign nationals (or governments) own much land and
factories in your country, what influence do they actually have? Are the land
and factories still not subject to your laws? So who depends on, and who dictates to who?
My government penalises me with high customs and duty fees for importing products (not available or for twice the cost in Canada) from the U.S.
I don't differentiate between an individual's geographic location who works to provide a product or service at a price I can afford. It is the government who makes the problems. What about a community that borders two countries. In accordance to government legislation and regulation, they are not free to trade with one another without government interference even though the only thing separating them is an arbitrary political border derived from bureaucracy.
Free citizens: I think not.
Suppose it weren't a subsidy. Suppose one nation or trading partner had access to some resource or technology not practical in the other place? If you still say tax it, what if it were with the same country as the competitor? It seems like this is a policy of gov't using force to keep people from creating new value and trading it with one another. I know you're not for that, so why does it matter if it's a some natural resource or a subsidy?
I'm amazed at how many things President Trump does get woven into a narrative where they are part of complicated machinations to achieve the opposite of what he's actually doing.
They are accumulating capital, which they can then use to buy land, factories, mines, and other resources."
I consider buying products and investing in business to be good things. They'll be more successful in low-tax countries where they can buy even more and invest even more.
Consider the workers who are now unemployed or getting lower pay.
Before, government power had led to pay and employment higher than the market alone would have provided, the costs coming from the public at large. If this is retribution, shed no tears.
The usual approach is to give in to a pressure group and impose a tariff. Then as buyers suffer, subsidies, tax credits and so on are given as compensation to those who also have pull. Complications, subsidies and public sector careers grow. Unwinding it all may have downsides, so government says wait for us to negotiate a round of reductions.
Maybe a new tariff strengthens a bargaining hand.
It is the big corporations that approach governments with proposals that if they are given some subsidy or other advantage, jobs are created, actually, taken from some other place.
Moocher management finds it easier to get a tariff or subsidy than say enough to union demands. Politicians are happy to oblige. Labor gets more pay, management cuts R&D and has no need to match competitors' productivity.
It is right to feel for the unemployed, tho' as a principle I prefer Judge Narragansett's- no law shall restrain freedom of trade.
Once that power is allowed there is no end to rake-offs and cronyism.
Act for the unemployed by requiring- Right to work.
To conclude:
combine free market ideals with pragmatism- say to a nation with tariffs that you do not have to buy our stuff, but we are not going to punish ourselves by imposing counter-measures by childish tit-for-tat.
Can any society long live with an aggregate current-account deficit?
If it was necessary to survive and we didn't have steel we would have to build better tanks, jeeps and trucks out of other materials. During WW II, we had no reliable source of natural rubber so we invented synthetic rubber. When OPEC caught us with our pants down and squeezed us on oil we found new oil and methods of extracting it. America was once, and still is in some ways the most productive and innovative nation/society that has ever existed. The secret to our survival is to understand why that happened and to nurture it.
What did it get us? The Europeans, instead of participating in a real free market, increased tariffs whenever a U.S. product threatened to become more popular with their consumers than their domestic brand (U.S. autos and trucks carry a 25% tariff). Canada put huge tariffs on American lumber (why, I'm not sure, given their abundance of those resources), dairy products, to prevent a merciless assault by those Minnesota descendants of vikings on the Canadian dairy farmers market, and thousands of other U.S. goods (over 8,000 at last count). Even before Trump's announcement of possible tariffs on aluminum and steel, Canada was already considering raising tariff rates and expanding the number of good subject to tariff. Canada has enormous transportation costs, even for its domestic products, which means without an open U.S. market, tariff free, it would have serious difficulty competing in the global market. There have been warnings by Canadian economists that raising tariffs could jeopardize NAFTA, even during the Obama administration.
Mexico has been a little less abusive, preferring to institute a "dynamic" tariff system, with no tariff over 5-10% so long as the American product is not less expensive than the Mexican one, with exceptions. Alcohol,tobacco products, prepared foods, and sodas carry a tariff at up to 160%. Industrial chemicals have a heavy tariff burden of 50% or more, and China has taken Mexico to the World Trade Organization more than once for abuse of this practice.
Trump's tariff talk is an attempt to rattle cages and get people talking seriously about how to improve global markets and induce real free trade. China seems to be the only one to be willing to have a sincere trade dialogue.
They are accumulating capital, which they can then use to buy land, factories, mines, and other resources.
With purchase comes control.
Now I'm sure some of you will say that those who buy land, factories, mines, etc. in this country, risk losing everything to nationalization in the event of war. But before we can even get to that point, remember this: a country that cannot on its own build tanks, jeeps, trucks, ships, planes, missiles, etc., and fully clothe, feed, equip and deploy its troops, is a country organized to lose wars.
IMHO the Japanese virtually wrote the book on "How To Screw Your Trading Partners" with special chapters dedicated to screwing the USA, parts of which have been studied and implemented by other nations. Today the tome has been added to considerably by the Chinese and taken to a whole new level. I agree with Trump in saying the major fault lies with our own government and it's time we got things fixed.
Recall the third debate in 2016 Trump had with Clinton. He was taking bragging rights to his new building in Las Vegas and the Evil Hag cackled "made with Chinese steel" in the background. Trump missed the opportunity to ask why it was possible to produce and ship steel from the other side of the planet at a price more competitive than an American mill virtually down the block. For me, it was a deja vu moment. In 1986 I was having a business lunch on an upper floor in a rather tall building in Pittsburgh, Pa. and was standing by the window admiring the view when a VP of research from Alcoa Aluminum came up next me to do the same. He pointed at a bridge crossing the river below (I believe it was the Ohio) and said "Here we are in steel town USA and that bridge is made of Japanese steel". Oh well...
I'm not a big fan of tariffs, bu the argument that the consumers win is simplistic. The consumers win as long as they maintain their current income with cheaper goods.
The people here who advocate "0% or 1000%" are not consistent advocates of capitalism.
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