The Problem with Trump’s Protectionist Tariffs

National Review ^ | March 8, 2016 | Jim Geraghty

[reaganaut1]

Donald Trump has pitched himself to voters as a proud protectionist, intent on punishing the Chinese companies that he says are hurting American workers. In his January meeting with the editorial board of the New York Times, he said he would impose a 45 percent tariff on all products imported from China.

Luckily, we don’t have to guess how such a tariff would impact the economy, because the Obama administration attempted a version of Trump’s idea seven years ago. It did not go well.

“It’s basically a real-world case study on what would happen if we imposed 35 percent tariffs on Chinese imports,” says Scott Lincicome, an international trade attorney and adjunct fellow at the Cato Institute. “In this case, we saw huge costs for consumers, gains by other foreign competitors, and almost no gains for American workers, even under the most generous of assumptions.”

By 2009, the United States was importing tires from China at a rate of about 50 million per year. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union complained to the Obama administration that there was a “large, rapid, and continuing” increase in the number of Chinese-made tires entering American markets. In September of that year, Obama approved relief for domestic producers by increasing tariffs on most new tire imports for three years.

...

Economists Gary Clyde Hufbauer and Sean Lowry note that the number of Americans employed in tire manufacturing increased from 50,800 in September 2009 to 52,000 in September 2011. If all 1,200 jobs were attributed to the tariff — an exceedingly generous assumption — they calculate that Obama’s move could be credited with saving or creating $48 million of additional worker income and purchasing power.

[jmaroneps37]

Surprised the gnat-Review didn’t mention Smoot-Hawley for goodness sake.

[Mollypitcher1]

Higher tariffs probably make some sense in certain cases. Not so in others. But one thing is for sure, this country and its workers have been getting repeatedly rolled by “free trade” agreements for over thirty years now.
............................................................
AND the result is we have LOST our Manufacturing Base, the prime source of our wealth and stability.
We started out as a country with tariffs. Time to use them to protect what we have left and even-up the playing field. It has become RIDICULOUS that one can’t buy a simple plate, cup and saucer, cooking utensil, screwdriver, or anything else for that matter that isn’t marked MADE IN CHINA!

[KC_for_Freedom]

We cannot discuss higher tariffs (OK if not too high because they to up the price for everyone) without also discussing why companies are relocating overseas.

The is the result of our corporate tax structure and their willingness to work for less.

Again, putting all this together is a complex negotiation, Trump indicates that his people would do a better job than the free trade agreements done so far. I would let him try, we should not have given away our manufacturing base.

[Will88]

Oddly everything seemed to work. And it was affordable.

And you could most always find a job, summer job or longer term, in one of the manufacturing plants located in practically every community in the US.

[aquila48]

If we boil it down to it’s essence, the Chinese are paying us to keep people on welfare in return for keeping their people employed. And we pay our people on welfare better than they pay their working people.

Most of the surplus trade dollars that they get, they spend buying US treasuries which help fund the bulk of our welfare.

If you removed welfare from able working people and got rid of minimum wage most of those jobs that have gone to China and elsewhere would come back here.

The problem is us - we want the cake and eat it too. We want low prices and good paying jobs.

[Mollypitcher1]

Your reasoning is flawed. They don’t rely on tariffs, they simply bar our products from entering their country or only allow a token number of our products in, and they subsidize their companies and play games with their monetary levels. In all counts we lose, so why not use tariffs to make THEM PLAY FAIR?

[central_va]

It's impossible to have an adult discussion with Free Traitor™ zombie children. They cannot fathom tariffs were once a legitimate form of industry protection and as a tax revenue source. The US Govt ran on tariffs for 120 years before the progressives took over in 1913.

Free Traitors™ need to go on on notice - you are playing with fire. This isn't some sort of academic game that is going on. Trade and tariffs are political they have pluses and minuses just like open international markets have pluses and minuses.

The Revolutionary war was fought over British Mercantilism, and the Civil war was fought partially over Morrill Tariff Act.

My point is this, the American people have had enough of taking it in the shorts with gloBULLism and unFree Trade. Trump represents a peaceful means to an ends, to stop the trade rape and insanity. Perhaps the last peaceful chance.

The issue of trade and tariffs goes to the heart of self reliance and national security, both physical and economic.

Normally this situation would be a blood sport at this level of discontent but we have a strong republic and democracy. But time is running out for the Free Traitors™.

Torys and mercantilist ended up hanging from lampposts during the Revolutionary war. Good to remember that.

Trump may be saving your pathetic life and you don't even know it.

[MortMan]

I favor a “Reciprocal Trade Act”, where other countries’ own laws and policies are mirrored by the US.

(Even though it caused a war in “Debt of Honor” by Tom Clancy)

[ChessExpert]

You’re right to mention welfare. It’s a double-whammy. Firstly, it reduces the desire to work. Secondly it costs $ and, ultimately, jobs. As a simple example, turn every welfare dollar into a workfare dollar and you get a lot of jobs.

[central_va]

We want low prices

Low prices? You think they pass on production cost saving to the US consumer? What a joke that is.

[ChessExpert]

Simple and true.

[Mollypitcher1]

It is largely partly due to our corporate tax structure, but also due to government over-regulation and control. Small business, the backbone of our economy is being squeezed out by big government and big business. Bigger is NOT better. Centralized planning is NOT better for this country.
Freedom to create small businesses, innovations dreamed up by Americans, new products stolen and manufactured elsewhere to profit only the few, ALL these things contribute to the downfall of America. Where have our small towns gone? Where have our jobs gone? Where has America’s strength and INDEPENDENCE gone....It has all been gobbled up by the insatiable appetite of the big government-big business combine that profits a few at the expense of the many. Get government OUT of business and the free market will level the playing field. Trump is the ONLY one who can bring back American jobs. All the others are part of the problem, the New World Order!

[pierrem15]

Except for aircraft, we have no significant exports to China.

You also can't compare industry-specific tariffs with across-the-board national tariffs.

[pierrem15]

Open borders and "free" trade all part of the same globalist, oligarchical agenda.

The American elite really don't think of themselves as Americans any longer and chafe at the few remaining political and Constitutional restraints on the their behavior.

The most important part of tariffs and immigration restraints are to put ordinary Americans back in charge, which is why Trump's agenda is the subject of almost pathological loathing by the elite.

[central_va]

The elites love to make the prols scurry like lab rats in a maze. The more rats - the more fun.

[aquila48]

You’re not serious are you?

You can buy a pair of jeans for $10, a tee shirt for less than a couple of bucks, an iPhone as expensive as it is would cost double or triple if it were made here with union workers, and you can name tens of thousands of items that are dirt cheap compared to what they would be if they were made here.

[Agnes Heep]

It’s just like Marxism. People’s eyes are opened only by experience. Experience.

[central_va]

You can buy a pair of jeans for $10, a tee shirt for less than a couple of bucks,

You use clothing which is the most labor intensive product there is and NOT the norm. Labor for most manufactured goods is a small part of the overall price.

But even cloths would only be marginally more expensive if Made in the USA.

[KC_for_Freedom]

Good point that I should have mentioned. Thanks

[Mollypitcher1]

And now Boeing is building a plant IN China that will profit Chinese workers and cost American workers.....and what about our national security???????????????????????????????