Posted on 03/22/2018 9:08:44 PM PDT by Tolerance Sucks Rocks
The new tariffs announced by President Donald Trump have generated intense controversy.
With the debate ongoing, it might be useful to examine how other countries have dealt with similar policy debates in the past.
New Zealand now ranks third in The Heritage Foundation’s Index of Economic Freedom and is one of the champions of economic freedom around the world. But it wasn’t always so.
In the mid-1980s, New Zealand was facing an economic crisis, with its domestic market and international trade both heavily regulated. Unemployment had reached 11 percent, and inflation was a sky-high 15 percent.
In response, the government of New Zealand began implementing revolutionary economic reforms, most significantly related to trade policy. It announced in 1987 a program that would reduce the tax on imports to under 20 percent by the year 1992.
By 1996, that tax was reduced further to under 10 percent, and by the end of 1999, about 95 percent of New Zealand’s tariffs were set at zero. Successive New Zealand governments, whether conservative or liberal, have maintained the strong commitment to free trade.
As the following chart illustrates, New Zealand’s adoption of less restrictive trade policies has corresponded to its climb up the trade freedom scale in the Index of Economic Freedom, and with a huge boost in per capita gross domestic product.
(Excerpt) Read more at dailysignal.com ...
No, but now the citizens of NZ get to buy cheap, badly made Chinese toasters.
New Zealand GDP Growth Rate 1987-2018 | Data | Chart | Calendar The New Zealand economy advanced 0.6 percent on quarter in the fourth quarter of 2017, matching the expansion in the previous period but slightly below the 0.7 percent growth expected by consensus. Manufacturing output edged down 0.1 percent after expanding 0.7 percent in Q3. Meantime, construction lost steam in Q4 (0.7 percent vs 3.5 percent). In contrast, utilities rebounded 1.5 percent after plunging 1.9 percent, whereas services grew further (1.1 percent vs 0.6 percent). On an annual basis, GDP expanded 2.9 percent, also below consensus expectations of 3.1 percent growth. GDP Growth Rate in New Zealand averaged 0.64 percent from 1987 until 2017, reaching an all time high of 2.80 percent in the third quarter of 1999 and a record low of -2.40 percent in the first quarter of 1991.
The argument that the laws of economics mysteriously change because the country is bigger is bogus. Water still boils at 212 even with a bigger pot and, once again, tariffs are still taxes , even if the country applying them is bigger.
Tariffs ARE taxes, and more than that are PUNISHMENT for bad behavior. When China starts acting more like New Zealand we can eliminate those tariffs.
And what is the size of New Zealand’s economy? The same as the size of Delaware’s maybe.
Interesting. So when did we ever have free trade with China?
New Zealand’s trade deficit widened to NZD 566 million in January of 2018 compared to a NZD 227 million gap in the same month of the previous year and expectations of a NZD 2710 million gap. It was the largest deficit for a January month since 2007, with both exports (+9.5 percent year-on-year vs +24.3 percent in December) and imports (+17.1 percent vs +10.8 percent) reaching new highs for January months. Balance of Trade in New Zealand averaged -52.19 NZD Million from 1951 until 2018, reaching an all time high of 1157.64 NZD Million in April of 2011 and a record low of -1387.99 NZD Million in September of 2016.
Small island nation vs a continental power like the USA. No comparison. What a bunch of BS.
If “Free Trade” is such a good idea why does China, EU, Japan and S. Korea all practice protectionism and threaten protectionist tariffs in retaliation all the time?
We don’t even have Free Trade now.
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