Wed. Apr 14th, 2021

Is a form of fee Levy. They may be popular in some quarters and may also help win votes, as politicians are proving, at least as President William McKinley, but they are still devastating in the long run.

The 25 percent tariff president Donald Trump slapped on steel imports last week could cost him a few more votes in Michigan and Pennsylvania and the rest was called “The Rust Belt” when it was the center of heavy American manufacturing. For the rest of us, this means higher prices.

This may indeed be the case that imported steel and aluminum are priced incorrectly and competitively because governments in countries where they are mechanized and subsidize their production. But is it wise to respond by saying that we will, in fact, increase the price of these goods to our end, even making things out of them and to improve the cost of production to improve the price of what you are selling. Will reflect The best is a risky proposition.

The Trump Steel tariff raised the price on the spot market by about 20 percent. Its negative economic effects are considerable, no matter what Commerce Secretary Wilbur Ross or anyone else has to say about it. Anything produced by the use of steel is just more expensive. Anyone who received a bonus or bonus or both from their employer due to the recent tax cuts simply returned it across the board. It is difficult to find an industry in the US that does not use steel or buy things made from it.

Sure, it’s nice to think that we pasted sugar into the ribs with the help of a sharp elbow. They steal an estimated $ 500 billion of US intellectual property every year and we have yet to do anything that might be able to bear that tide. Some form of economic retaliation may be in order – no matter how many US debt they are buying, as long as the US Treasury is buying something away from the auction – but we want to sell more things in China, not less. . It would be irrational for Beijing not to respond to tariffs in one way or another and if we know one thing about the Chinese, it is that they are quite rational when it comes to trade matters. They are also playing long games.

Political cartoon on economy

But let’s leave for a moment that Trump’s tariffs could produce a trade war with the Chinese or anyone else. Even in the global economy, it has fundamentally business roots in the rest of the world. The United States is naturally by tilting into free trade, making us pigeonhole for protectionists in other countries who constantly seek concessions from us that repeatedly produce “bad trade deals” to the president. Protectionism is not good for American industry or American workers in the long run.

Remember the economic displacement of the 1970s, when oil shocks and high inflation shook the American economy? We then thought that protectionism of our industry was the way to go.

It did not turn out like this. The protectionism of the economy was badly hurt from industrial to post-industrial. This killed the jobs. It killed communities. It almost killed the country because no one was prepared to face reality and reacted with the necessary measures to be competitive in an emerging global economy.

It wasn’t just about tariffs – then or now. Other countries had learned to produce goods that were better or better than the ones manufactured here, as well as being less expensive, in more than one case because we showed them how to do it. American industry failed to respond, not just because they did not see the threat coming, but because they could not: an entire regulatory system stood in the way, a regime that eventually became clear when American trade It fled the country to flee, killing businesses whose sponsors and defenders claimed it would save.

Presidents like Ronald Reagan have shown before them that nervousness produces economic benefits. Actions on the subversive front by the Trump administration in its first year have saved the American economy from a horrific decade. There was a new push towards protectionism, which perhaps seems sensible now, which would be a shame to elevate even more heights to those already sensible, who may follow Trump, who, like his predecessor They had no one, understand how the economy works and were only interested in winning votes.

If it becomes a settlement negotiation just to convince Chinese, Canadian, Mexican, European and other trading partners, it is serious about ending the US era that is getting the low end of the stick in trade deals Is, then his tariff may someday be cited as an example of political courage that produced great dividends for the nation. If he is serious about them, if he truly believes rhetoric with these charges, which are not only here to stay, but more to come in future days, then he is already Has begun to end the economic legacy of its own presidency. “Major McKinley” may have been able to make it work but that was then; It is now.

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