Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
I’m a Tariff Man
From the President’s Twitter account: “President Xi and I want this deal to happen, and it probably will. But if not remember … I am a Tariff Man.”
“When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” the president wrote. “It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”
The mocking reactions were predictable enough from both the right and the left. It’s interesting, too. From the left it seems we’ve finally found a tax the Democrats don’t want to embrace and a willingness to tell unionized industrial workers in America to go pound sand. From the right, we’ve finally found an issue where they’re willing to say that Ronald Reagan was full of it.
“Wait a minute,” you say. “NAFTA had its roots in the Reagan Administration!” True enough, but Reagan’s was also a presidency full of protectionist tariffs and policies*:
- Forced Japan to accept restraints on auto exports;
- Tightened considerably the quotas on imported sugar;
- Negotiated to increase the restrictiveness of the Multifiber Arrangement governing trade in textiles and apparel;
- Required 18 countries, including Brazil, Spain, South Korea, Japan, Mexico, South Africa, Finland, Australia, and the European Community, to accept “voluntary restraint agreements” that reduce their steel imports to the United States;
- Imposed a 45% duty on Japanese motorcycles for the benefit of Harley Davidson, which admitted that superior Japanese management was the cause of its problems;
- Raised tariffs on Canadian lumber and cedar shingles;
- Forced the Japanese into an agreement to control the price of computer memory chips;
- Removed third-world countries on several occasions from the duty-free import program for developing nations;
- Pressed Japan to force its automakers to buy more American-made parts;
- Demanded that Taiwan, West Germany, Japan, and Switzerland restrain their exports of machine tools;
- Accused the Japanese of dumping roller bearings on grounds so that the price did not rise to cover a fall in the value of the yen;
- Accused the Japanese of dumping forklift trucks and color picture tubes;
- Extended quotas on imported clothes pins;
- Failed to ask Congress to end the ban on the export of Alaskan oil and timber cut from federal lands;
- Redefined dumping so domestic firms can more easily charge foreign competitors with unfair trade practices;
- Beefed-up the Export-Import Bank, an institution dedicated to distorting the American economy at the expense of the American people in order to artificially promote exports of eight large corporations.
This was not out of character for Reagan. In the 1980 Republican Platform his ideals toward trade was laid out in clear and simple language. “The [Carter] Administration’s inability to ensure fairness and equity between our nation and some of our trading partners has resulted in massive unemployment in many core industries. As we meet in Detroit, this Party takes special notice that among the hardest hit have been the automotive workers whose jobs are now targeted by aggressive foreign competition. Much of this problem is a result of the present Administration’s inability to negotiate foreign trade agreements which do not jeopardize American jobs. We will take steps to ensure competitiveness of our domestic industries to protect American jobs.” (Emphasis mine.)
As international trade agreements began to be hammered out, through the Republican Administrations of the two Bushes and the Democratic Administrations of Clinton and Obama, how did this work out? Not so well? Hey, these jobs are gone and ain’t coming back. No Reaganite worth his salt would embrace Trump’s tariffs, right?
Again, from the ’80 Reagan platform with my emphasis:
The Republican Party believes that protectionist tariffs and quotas are detrimental to our economic well-being. Nevertheless, we insist that our trading partners offer our nation the same level of equity, access, and fairness that we have shown them. The mutual benefits of trade require that it be conducted in the spirit of reciprocity. The Republican Party will consider appropriate measures necessary to restore equal and fair competition between ourselves and our trading partners.
If you asked any conservative if we should unilaterally disarm militarily they would rightfully look at you as if you had grown a second head. Yet, they will insist on complete unilateral disarmament in trade. But, Trump, right?
*Source: Mises Institute
Published in General
Ok. Assuming you support free trade because it prevents consumers from benefiting from low costs, justify the difference.
Now you’ve taken this entire discussion one step too far. Do NOT jack with hot Swedish Au Pairs. That would be a national emergency.
Me too.
Unrelatedly, Mrs. Ed G. has suddenly cut off all diplomatic ties. Perhaps she was spooked by a Trump tweet.
Allowing an American citizen to purchase a Swiss watch is quite different from allowing someone from outside the country to become an American citizen.
It’s one thing to attempt to maximize economic activity and wealth through voluntary exchange including international trade. It’s quite another to attempt to maximize the number of citizens by granting everyone in the world, all 7 billion of them, the right to become an American citizen.
Also, over the 20th century, the United States enacted a large social-welfare safety net. Allowing people to immigrate to the United States means that these people can obtain social-welfare benefits.
This social-welfare safety net is a drag on the United States economy. Unlimited immigration would have an even larger negative impact on the United States economy than a moderately restrictive immigration policy would have.
So, while I support immigration into the United States, I would like it to be mostly skills based and limited in number. With respect to free trade, I generally support government not making imported goods and services more expensive via import tariffs.
If the cost of shipping a car from South Korea to California is very expensive, then the consumer and producer of that car will have to haggle over who absorbs the shipping cost. But I don’t support having the federal government impose additional costs via import tariffs.
*Paid for by the Committee to Elect EJHill.
China is sometimes like North Korea.
Because………
No no no you have it all wrong. I don’t want to import people in order to maximize the number of citizens, and I don’t need everyone in the world. I want the same Korean guy who used to make your car in Korea. That’s between me and him – who are you to get involved in our voluntary transaction to mutually optimize his and my wealth and enjoyment?
Also, I never said anything about citizenship.
Maybe the social welfare safety net is a drag on the US economy. So is having domestic consumption produced abroad. Why is it that broader trends and effects have no place affecting your desire to purchase a Korean car but all of the sudden the broadest societal effects justify you preventing me from importing that Korean worker who used to build cars for you?
The government already imposes additional costs in terms of air quality standards, labor law standards, safety standards, payroll tax, income tax, etc. Why can’t you haggle over the tariffs too? Why is this the straw that will break the camel’s back?
I always thought that the problem with tariffs was not that taxing consumption was bad but that tariffs would cause other nations to retaliate and start a trade war. Well, what if the other nations are already “unilaterally retaliating”?
I’ve always considered it a truism that a tax on anyone is a tax on everyone. Is there some mechanism that prevents companies from passing their costs onto consumers in this context?
No mechanism I’m aware of. I’m just trying to get Heavy Water to live according to his own logic.
I have tried to answer your questions and the response I get is . . . . . . . more questions.
Excuse me while I eat my red potatoes, imported from Mexico.
I’ve heard before that questions are my “tactic” of choice. It’s not a tactic, though. You’re saying contradictory things and you’re saying a scattershot of things, and I want to understand if it’s you or if it’s me. I think it’s you in this instance.
I understand a lot of this. I voted for Trump and support most of what he’s doing. I think someone saying Trump doesn’t agree with tariffs in principle when he actually said the words I’M A TARIFF MAN is disingenuous. Trump will say just about anything, depending on whatever pops into his mind at any point in time, and I wish he wouldn’t do that. But that’s water under the bridge/over the dam at this point.
And I’m NOT a tariff man.
What’s disingenuous is not looking at the whole Trump quote. Obviously the carrot is reciprocal trade, but the stick is tariffs. That’s been his tactic since he took office. What’s disingenuous is implausibly believing that uttering those isolated words is incontrovertible evidence regardless of other plausible explanations. You know, I like everybody and I try to help people, but mess with my family and I’ll be a stone cold killer. Does that mean I must be supportive of killing as a general principle?
Or maybe it’s not disingenuous. I think I’ve learned all I can from this thread; see you all down the road.
Again, let’s go back to how he dealt with Europe. He said “I like tariffs!”
So when he proudly announced that he and Juncker would be working toward zero tariffs, was he secretly mad about that? If he really wanted no tariffs, why would he say “I like tariffs!” to open negotiations?
Ever play poker?
All right, I’m going to say it out loud about this serious, intelligent discussion thread. The title of the post keeps me thinking the theme song is–
https://www.youtube.com/watch?v=ZVx2i6jGzf8
China would probably take that deal, as we have more IP to lose than they do.
Seems a reasonable start, but I’m not sure it addresses the common complaint that governments like China subsidize certain industries that then engage in “dumping” or selling goods at a loss.
Should we respond with mirror subsidies to our own industries? Of course we already heavily subsidize agriculture, a practice many of our trading partners complain about (and one I wish we could eliminate).
That’s certainly the position many libertarians take.
It’s also similar to the policy of the EU which insists that if member states want access to the common market, they must also accept unrestricted immigration from other EU nations.
Are you proposing to settle the tariff question with a dance-off?
Part of me wishes that as well.
But I also know that starving people survive on our overage.
But do the subsidies made food cheaper and more plentiful? My understanding is that the government pays farmers to not grow crops, in an effort to artificially raise the price of food, in programs originally intended to help small family farmers that now mainly benefit large agribusiness conglomerates.
Plus we buy a whole lot of corn and turn it into ethanol, because oil is evil, or something.
It reminds me of this old commercial:
I don’t see immigration and trade as being necessarily connected. As a practical matter, a nation can have zero import tariffs (with exceptions for Iran and other nations of that ilk) and have restrictions on immigration.
Is there really a contradiction? Does Trump believe that as long as he is not supportive of open borders that he must impose import tariffs on South Korean SUVs?
So, as soon as Trump negotiates a good trade deal with China, he’s going to go full Kristen Gillibrand, abolish ICE and go open borders on us?
It’s not a war if the offended is a doormat.
Tariffs raise the cost of imported goods.
Immigration restrictions raise the cost of imported labor.
*IF* someone’s argument against tariffs is the purely economic “They make things more expensive for the consumer, and therefore they are an absolute evil and no other reasons for having tariffs can be considered legitimate”, then I would like an explanation of the difference between that and open immigration.