Thank you for the economics lesson. I hadn’t thought of that angle. However I would rather buy American than contribute to the economy of any nation that would not be hesitant to drop a Nuke on us. I recall in Korea while our men died fighting the North Koreans and Chinese while they ignored us at the peace (?) talks.
2 Likes
Actually, i would prefer if America was less dependent on other countries for goods and services, and could manufacture everything needed with the quality and pride it used to have. That way politicians wouldn’t be owned by other countries, and would actually do what they are supposed to with integrity and an "America first " mentality. I would prefer not to have to contribute money to other countries that would love to see us dead.
1 Like
You are free to make that vote with your dollars aren’t you?
You can buy anything you like made in the US. I’m skeptical of economic protectionism. Protectionism tends to drive up prices, and push down wages as protected industries have less competition and no incentives. Making some protectionist policy for American steel say, would only have the effect of driving up the cost of said steel, and thus any steel components across many many industries. This would get passed on to consumers. Protectionism tends not to be good for consumers or workers.
Also, how are policies that provide goods and even services cheaper (cheaper components often translate to cheaper services) for Americans not “putting America” first?
https://www.cato.org/policy-analysis/doomed-repeat-it-long-history-americas-protectionist-failures
1 Like
Weird that you say that… you are aware that expenses drive prices, yes? Let’s look at Ford and GM and the UAW negotiations in the year 2023… please tell me again how protectionism drives wages lower? Want to know why your Ford is going to be more expensive? There you go. While i agree that without competition to keep manufacturers honest, the cost for goods can get out of hand, the cost of American labor is higher than the cost of a 10 year old in china. I also have an article… please enjoy while I read yours.
P.s. I’m just a redneck and your article is lengthy, so please be patient with me as I will probably take a little while.
1 Like
A trade deficit simply means that the US buys more Chinese goods and services than it sells to China. That can be attributed to a number of things, such as: (1) the US does not make and export to China goods and services that Chinese consumers want or can afford; (2) Americans prefer Chinese goods and service more than they perfer/demand US made substitute goods and services; (3) there are government import/export restrictions in place that make US exports more expensive and less competitive than the goods and services Chinese consumers demand; and, (4) differences in the size of the Chinese market vs the US market for particular goods or services.
The “big brains” we elect to office often view tariffs as a means of making the US more competitive, but given the mobility of capital, imposing a tariff on Chinese goods and service just moves production to another country (e.g., the Chinese electronics subject to US import tariffs are now made in Mexico or Vietnam) and does not make US goods or services more competitive. Tariffs are just a means of pandering to potential voters and does nada-la-squada to make the US more competitive.
1 Like
I think the idea is backwards from your explanation. If Country A, lets call it Brina, increases tariffs on US goods, it has a direct affect on the US’s competitiveness within Brina. Although the EU has lost a significant amount of power it’s consumers’ strength on the international market, it’s tariffs and or import restrictions from US goods, whether assigned directly in the terms of a tariff or embargo, or indirectly in terms of types of goods the US primarily produces, also has a significant effect on the US competitiveness in those countries.
2 Likes
I know what a trade deficit is…
The trade deficit directly effects American people losing their jobs when domestic companies move overseas to produce cheaper products. Driving companies out of the country isn’t helping the millions of Americans in those industries keep anything, and it sure isn’t putting America first. The issue is that people have zero problems paying more for a double buger because the employee making it makes $15 an hour (to do it wrong, might i add), but when a company wants more for a truck because the employees making it got a 23% base raise, everyone wants a honda. Also, tell me how wonderful the 4-plus dollar gas was after the government shut down oil production and we got bent over a barrel by opec…that was putting America first for sure…glad all that tarrif money let my friends in the field all keep their jobs
1 Like
Tariffs (and tariff wars) don’t make countries more competitive, irrespective of who imposes them. When Brina imposes tariffs on, say US cars, automakers can avoid the tariffs by shifting production to another country, or Brinese consumers simply buy imported cars from some other country and Brinese automakers are left holding the bag.
But when “big brain” politicians announce that they will impose tariffs on, say Korean made washing machines, they create the illusion (a lie) that they are doing something to make US firms more competitive. “vote for me! I’ll impose tariffs on the Chinese! I’m doing something that will bring jobs back to US manufacturing!”
No hurry on the article. I don’t mean to imply that protectionism is the only factor, there are certainly others. But it often backfires and drives up prices. I’ll get to your article after I cook dinner!
Thanks.
Not buying a particular company’s products - for whatever reason(s) one has - is not protectionism. My not buying Chinese products isn’t a government program to protect another company from a foreign competitor - “protectionism”. You also faiil to explain that, such as Chinese steel, being shipped to the USA at prices lowers than it costs to produce it, is designed to destroy that US industry, aka economic warefare, at least as bad as tariffs are.
1 Like
A person choosing to not to buy a product because it wasn’t made in the US is not protectionism as you say. I only brought up protectionism because you seemed to imply you wanted politicians who endorsed and implemented protectionist economic policies.
Since I wasn’t defending any nonsense the Chinese government was up to, I didn’t feel the need to explain anything the Chinese do economically, which is generally terrible for every other country in the world with whom they deal.
But you did:
The dumping of Chinese steel is one of the problem of why US steel companies have had financial problems. it is also the issue with other things the Chinese export. One of the reasons the Nazis and Japan were defeated was due to their not having the industry and supplies needed to fight a war. The US being dependent on foreign countries, especially one that is anti-American - China - makes us vulnerable.
4 Likes
One of the reasons firms lobby for tariffs is to disadvantage their competitive rivals by enlisting the coercive power of government to impose taxes on rivals that domestic firms do not face. Tariffs don’t make domestic firms more competitive – they still have the junky production processes, bloated labor costs and supply chain curfluffels that they had pre-tariffs – and tariffs don’t benefit consumers by reducing market prices. Domestic steel producers have financial problems for reasons that extend beyond alleged Chinese dumping (which provides political rhetoric that does not make domestic firms any more efficient).
Tariffs also fail to recognize that capital is mobile. Impose a tariff on Chinese electronics/solar panels or Korean cars/washing machines, and firms will avoid the tariffs by relocating in countries that are not subject to the tariffs (e.g., Vietnam, Canada, Mexico) or investing in alternative technologies and markets that are not subject to tariffs.
For example, the solar panels I have were partially made in Israel and Canada, the racks those panels sit in were made in Germany and who knows where the cabling and inverter was made. Imposing a tariff on Chinese solar panels in that environment won’t make centralized electric generation by US utilities any more competitive or cheaper. Nor will tariffs reduce the retail price of electricity. The world is not an economically static place.
But tariffs are popular because they get economically brain-dead politicians elected. “Vote for me!! I’ll restore US economic prospects by taxing the Chinese.”
Which is not what I am addressing - twist and turn.
H-e-e-y. With “Bidenomics” being what they are, he’s wearing my new suit. Barrels are too expensive…
4 Likes
Closing a plant, buying off workers, training new workers, building a new plant, purchasing machinery, establishing accounting, billing, and shipping for a new country is not cheap, but is one of many strategies to offset the reduction in competitiveness over the long run compared to keeping production in country.
After all, why do all of that if the increased tariff is not reducing competitiveness.
Additionally, if country A has tariffs on US goods at 35%, and US has tariffs on country A’s goods at 15%, there is an influence on the competitiveness of the corresponding products.
Other restrictions that the US might or might not follow, such as requiring country A to have 51% ownership of the main company might not be mirrored in the USA but can somewhat be offset by increasing the tariff on that country.
If Japanese cars increased in price by 30%, not far off from what they have increased in the last two years, you don’t think it would affect the sales and skew the competition into a better value for the consumer?
There’s an additional factor of manufacturing vs sales in different countries relating to taxation and taxation/fee issues with repatriation of funds. However, political attempts to push legislation on these areas gets into the weeds when trying to explain it to the public. This also influences the companies on moving manufacturing, a headquarters, etc. to other countries.
3 Likes
Amen to that, Brother. One of the reasons we were able to defeat the Nazis and the Japanese was that our heavy industries were able to outproduce war material faster than they could blow it up. Our automobile assembly lines were quickly converted to produce tanks, airplanes and even the M-1 carbine was produced on the assembly lines of a GM subcontractor.
4 Likes
And don’t forget all that Iron Ore and Copper that came from Da U.P. N. Wisconsin and Minnesota. 
They say the two W.W.s depleted most all of the easily accessible ores. 
2 Likes