Posted on 03/04/2018 8:00:35 AM PST by Kaslin
One of the ironies of trade protectionism is that tariffs and import quotas are what we do to ourselves in times of peace what foreign nations do to us with blockades to keep imports from entering our country in times of war.
Or consider that we impose sanctions on U.S. enemies such as North Korea, Russia and Iran because we want them to feel the economic pain of being deprived of imports. But now we are imposing sanctions on our own country by punishing with tariffs in order to make Americans more prosperous. If ever there were a crisis of logic, this is it.
Donald Trump genuinely believes that his steel and aluminum tariffs will save thousands of blue collar jobs. And we know from our interactions with him that he truly cares about these workers in Pennsylvania, Ohio and other rust belt states. We do too and we don't want factories to shut down. But even if tariffs save every one of the 140,000 or so steel jobs in America, it puts at risk 5 million manufacturing and related jobs in industries that use steel. These producers now have to compete in hyper-competitive international markets using steel that is 20 percent above the world price and aluminum that is 7 to 10 percent above the price paid by our foreign rivals.
In other words steel and aluminum may win in the short term, but the steel and aluminum users and consumers lose. In fact tariff hikes - which are really tax hikes.
Some of those 5 million jobs will be put in harm’s way. And if they sell less to foreigners, the trade deficit goes up, not down. Since so many of the things Americans consumers buy today are made of steel or aluminum, a 25% tariff may get passed on to consumers at the cash register. This is a regressive tax on low income families.
Trump should also examine the historical record on tariffs, because they have almost never worked as intended and almost always deliver an unhappy ending.
The Smoot Hawley tariff of 1929 signed into law by Republican President Herbert Hoover gave us and worsened the Great Depression.
Richard Nixon’s 10% import surcharge contributed to the stagflation of the 1970s.
George W. Bush tried to save the steel industry by imposing tariffs on steel and If those tariffs worked, we wouldn't be having this discussion today. We tried to save the color TV industry with protectionist measures and instead they wiped out the domestic production.
We aren't persuaded by the Trump administration claim that we need to impose these tariffs for national security reasons. Despite stiff competition from imports, many specialty steel producers are doing just fine and actually exporting steel to Mexico and Canada.
Meanwhile, Canada is the number one exporter of steel to the United States. Does anyone really believe Canada is a national security threat to the U.S.?
What does worry us is that Canada and Mexico are now both threatening retaliatory tariffs against America. This tit for tat trade breakdown could put NAFTA in serious jeopardy. That could inflict severe economic damage to all three nations, and a stock market meltdown.
Trump should continue to make American producers more competitive in global markets through tax, regulatory, energy, and other pro-America policy changes that bring jobs and capital back to the United States. That is happening at a furious pace right now as Trump has made America almost overnight the best and most reliable place in the world to invest. Steel and aluminum import tariffs work decisively against this goal.
In the early 1980s Ronald Reagan’s invoked anti-dumping provisions against Japanese steel. It was one of his few decisions he later confessed he wishes he hadn’t made. Trump will come to learn the same thing, and we hope it is sooner, not later.
Yes, tariffs are taxes, and the steel and aluminum tariffs will raise prices for consumers and cost jobs in domestic industries that use those metals.
Sorry Kudlow, FAIR, reciprocal trade is a timely brick thru the window of globalism and the internationalist sperm who have squandered away America’s wealth. It’s long overdue but much appreciated in the rust belt.
The government has legitimate, and illegitimate tax avenues. Tariffs on imports was always considered the preferred and Constitutional way to raise revenue. Taxing ONE sector to protect it is not a trade war and will only have a minor effect on consumers for a short time. We must have steel and aluminum manufacturing to defend our country in time of war. Wars always come. Read a little history.
As long as you are OK with higher costs, fewer job and slower growth,then let’s have a tarifff party.
Yes, we all know that. And we also ALL know that these industries must remain strong because the potential for them to be needed QUICKLY in time of war is always there.
I don’t know why Larry Kudlow is making the argument tariffs are taxes? NO ONE is arguing that! WE KNOW THAT LARRY!!!
Only Larry with Globalists Bull$Hit try to resale his FAILED POLICIES. It failed for 20 plus years and was PROVEN DISASTROUS!...
It’s called reciprocal trade Larry. We tax other countries the same way they tax us.
Why????
Because if we do not the business moves to the country with the higher tariff.
Why would they do that?
Answer: Because that way they can sell BOTH to China and the United States for free.
If they stay in the United States and try to sell to China they are TAXED THROUGH TARIFFS like China Larry. Oh on top of that China manipulates the currency. It’s a rigged trading AGAINST THE UNITED STATES.
Why is this so hard to figure out???
We watched the slow industrialization of the United States?
Rigged ONE WAY TRADE that Larry loves created massive trade deficits, massive job loss, weakening of U.S. dollar, more polution (factories in countries w/less regulation), less savings, less investment in America, etc.
We were a super power with tariffs before these RIGGED ONE WAY TRADE SCAMS.
Reciprocal trade is fair
Every tariff is a trade deal. President Trump has been talking about unfair trade deals for some time, but apparently people like Mr. Kudlow must think that a trade deal must be turned into an acronym to be considered a real trade deal. Too much big picture, Mr. Kudlow. Get out of DC or NY or wherever you have cocooned yourself and get a refresher with the real world.
"But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade."
Cheap import without tariffs are taxes, too.
If a person sells a product at $10, but is undercut by foreign products at $1, he has suffered a $10 loss at the hands of government. That’s a $10 tax.
Free Trade is not Fair Trade.
How can Americans with a high standard of living compete with slave labor or people living in mud huts?? That’s not fair to ask them to do that.
It just a race to the bottom when that happens.
Trump announces a tariff on steel and aluminum. The EU says they will respond with tariffs on motorcycles, bourbon, and orange juice. Trump then says he will put a tariff on automobiles, which means that the EU will then put tariffs on other things. THAT is a trade war, and that's what we're headed towards.
Pure propaganda. The Depression was Hoover's fault?
I wonder how much of a threat it us to me. I don’t buy cars made in Europe and I bet that a lot of liberals do. So much for the threat from the EU.
“Yes, tariffs are taxes, and the steel and aluminum tariffs will raise prices for consumers and cost jobs in domestic industries that use those metals”
And Trump will never be elected, Jobs will never come back to America, 2% GDP is the new normal. Time will tell about tariffs, nothing is in place, Trump has just shot off the first Salvo.
Tariffs aka import duties are a tax on the buyer
When considering the Trump position, one should remember that he is first and foremost business friendly. He is now having meetings on various subjects with knowledgeable and affected folks. Although he makes statements that become sound bites, the most important takeaway is that he listens.
Then remembering back, the first groups invited to the White House for such sessions were many business leaders. We now know why there were several such meetings. Only so many can be accommodated by the big table. I would suspect that the actual Trump tariff policy was developed including what he heard in these meetings.
His goal is to increase sales. Sales includes export sales of products in specific countries with specific tariffs.
He will not shotgun tariffs, but using the Harmonized Tariff Code will tariff with a precise rifle to hit carefully chosen targets of countries that tariff specific American products.
misguided Brigadier isolationist drivel
Another globalist screed.
Yes, tariffs are taxes and steel and aluminum are strategic commodities which we need to be able to produce for ourselves.
——Cheap import without tariffs are taxes-—
The tax is negative
Americans like negative taxed imported goods
So, if they even the playing field, fine. We should have them not only on steel and aluminum, but how about those subsidized Airbus jets. Especially the ones Delta prefers over Boeing?
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