Posted on 02/02/2006 6:40:03 AM PST by Willie Green
'regardless of country of origin' ?? What incentive would such a strategy have to make China behave any differently?
So it was DOUBLY as painful!
None.
China is a sovereign nation with the right to self-determination and peacefully pursue their own policies.
They are capable of changing their own behavior.
We can lead by example, not by coercive "incentives".
This peels away some of the financial advantage the PRC would have to continue their economic strip-mining operation. I personally believe that this a fair proposal, but I recommend a 25% general revenue tariff. And in tandem, eliminating the Income Tax (corporate and personal, and capital gains)...and we instead go with a parallel National Sales tax of 15% to replace it. This punishes consumption of the foreign manufactures, rewarding domestic production, and creating incentives for savings and investment here in the U.S.
Meanwhile, since China is scofflaw on so many areas of their requirements to the WTO, we should simply commence things with a bang with them, and simply remove MFN status. Now. No ifs, no buts. No talking about. Just do it.
The legal effect of that is the immediate application of the still-good-law Smoot-Hawley Tariff. Without MFN status of some kind they would have an automatic 50% tariff slapped on their goods. That should pretty much shut down most (not all of) the rush to go to China. In fact it might have the effect of returning about $600 billion of production outsourced.
Meanwhile, all IMF, OPIC and ExIm Bank U.S. government subsidies for all further China relocation / 'investment' activities by US firms would be immediately cancelled.
btt
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