I’m a Trump supporter but no one including Trump has it all right and Trump is wrong on the trade issue.
It is false and misleading to say we lose $500 billion to China every year. Our imports from China in 2015 totaled close to $500 Billion. He and the “trade deficit” folks call this a $500 billion LOSS. But of course it is not a loss because we traded dollars for goods.
Did I lose $100 when I bought my groceries the other day? Of course not. I got groceries for money. I didn’t LOSE when I paid for the groceries I needed. And what Trump is proposing is instead of me paying, say, $100 for goods from China, I’ll be forced to pay more, say, $200 for the same thing because of these tariffs (taxes) and protectionist measures.
Taxing imports to try to force companies to stay here doesn’t solve the problem. Everybody loses and the consumer now has to pay higher prices because the government has put a 35% tax on incoming goods.
The tax (tariff) doesn’t hurt Mexico (or any importing country) - the prices (“A”) are already contracted for between Mexican and U.S. distributors. Mexico only pays A. The tariff/tax (“B”) forces the costs of these goods to go higher as they enter our country forcing higher prices at the local distributor for the American consumer who has to pay for A PLUS B. So it’s the American consumer that is really paying for the wall and exited businesses in the form of higher prices forced upon them by these tariffs. Our tariffs directly injure the American consumer and, thus, the American economy.
So not only do tariffs not address the root causes of business moving out of America, they make matters worse. Trump needs to address the ROOT CAUSE of losing our businesses: the FEDERAL GOVERNMENT. The federal government has created an unfriendly business environment in the U.S. with boneheaded policies like
- minimum wage
- taxes
- regulations
- federal protection of unions
Again, the issue is the unfriendly American business environment and weak American competitiveness caused by the skyrocketing costs of doing business due to GOVERNMENT INTERFERENCE like taxes, minimum wage, regulation, and unions. Address THAT and business will WANT to return/stay because of cost benefits.
Let the voluntary cooperation of the market economy free of government interference work. Don’t layer more government interference upon that which is the root cause to begin with.
But, as you said, trade wars will hurt our economy too.
The fallacy of tariffs is that if they hurt your trading partner, people feel (incorrectly) that they would help us. But it's not a zero-sum game. Tariffs will, in fact, drive our economy down too.
His advocacy of protectionism is a major reason that I cannot support Donald Trump.
I support Trump too, and your post is so correct. Thank you.
Just to add, the United States' second -ranked (after Canada) destination for exports is Mexico. Our deficit with Mexico is minuscule, and without oil we purchase from Mexico, we would have a trade surplus. NAFTA did not create a giant "sucking sound", we are blowing our jobs there because of proximity and an egregious and punitive tax and regulatory climate for American manufacturers.
Labor costs are way down the list of reasons to move, but CEO's can't tell the truth because they have to deal with the Feds long after they hit the door.
I am a Trump supporter but I agree with the concept of using all the factors you named, (tariff, regulation, taxes, Etc.) in the mix for a better deal. It is just as wrong to support total fair trade and lose jobs in country as it is to say a trade war would be wrong because prices would rise. Trump was also right on stage when he said the tariff could easily be overcome by moving a factory back to the states. In fact this is handled in military deals all the time. Countries want some weapon system and we agree that part of the assembly can be moved to the purchaser’s home base.
I would say that a negotiator could request that in return for lower tariffs a country could agree to import American goods at a certain rate or return some assembly to the states. It does not have to be all or nothing.
exactly
The problem is not that people are losing their jobs because of free trade. There is always going to be change and obsolescence, and there is no divine right of stagnation. The problem is that with a libtard mixed economy, it is hard to find an equivalent new job or a better job after one has lost his old job. But this is the fault of libtardism and not free trade.
That is a wonderful sentiment. How are you going to win the cooperation of the Chinese government, the European parliament and the world court.
“Did I lose $100 when I bought my groceries the other day? Of course not. I got groceries for money.”
Talk about a dumb argument.
It depends on how closed the system you are in. If it is local (inside country) you are correct.
However, when you buy something from overseas, the money and the job goes overseas.
You have what you purchased of course, but no one in this country has the job and no one in this country collects the money for producing the product. You are funding employment in another country. You have just displaced an American worker.
Trading dollars for goods is not equal when trading with Communist China. Gimme the dollars anyday and you can have all the crap I sell you.....because the object of the game is not to get resources, its to get money....that’s what you work for, money. You build things so you can sell them for MONEY. You save up your money and you can buy anything. You can save up all the TVs and other crap and you can’t buy with that....you can only hope to sell it for a profit so YOU CAN HAVE MONEY.
CHINA IS GETTING MONEY. WE ARE GETTING CRAP.
Its trading dollars that buy Communist China more nuclear weapons and U.S. in return getting underwear, TVs, ties, cell phones, tractors and on and on made by slave labor, using no pollution controls. NOT EQUAL AT ALL.
WHEN THIS COUNTRY WAS GREAT WE DID NOT HAVE A TRADE DEFICIT!!!!!!
but we did (While fighting a World Wide Cold War, a Hot War in Nam, fighting the democratic regressives at home) have a Space Program that put TEN MEN ON THE MOON.. something the entire earth all together has not even come close to doing even with 30+ years of more modern technology.
..that is what you call greatness......hint.
FAIR TRADE YES. FREE TRADE WITH COMMUNIST CHINA ...HELL NO
VIVA TRUMP