Of course not. There is a reason why we have a deficit trade balance with virtually every other country in the world. We are the least protectionist country in the world allowing easy access to our market while the other countries make it difficult for us to gain access to their markets. Why should we put up with the China placing a 25% tariff on our automobiles while we have a 2.5% on their cars?
The US is the largest consumer economy in the world and it makes sense that we buy more from many other countries than they buy from us.
The EU is a similar size consumer market and we run a $151 billion deficit with them. The EU is far more protectionist using VATs and tariffs to protect their farmers and industries. How is this fair and why is it acceptable?
True, and by doing so they're artificially holding down the standard of living of their populations. Why would we want to do the same?
Because we want to protect American workers and their jobs. US consumers may benefit by lower costs of goods, but American workers suffer as industries and jobs move abroad. We have seen wages stagnate or decline since 1969 and the gap grow between the wealthy and the rest of the society.
All a tariff does is force us to pay more for a good than someone else is willing to sell it to us for. Where's the benefit to us in that?
Cheaper goods from countries that in many cases have American companies located in them that are using cheaper labor and less restrictive controls (labor, environmental, etc.) and then export them back to America. Much of the cost savings are retained by the corporations who don't sell their products at prices that are not much lower than if they were in the US.
Some of the most prosperous and vibrant times in US came when the US was more protectionist. Do you think NAFTA has been a good deal for American workers? NAFTA’s Legacy: Lost Jobs, Lower Wages, Increased Inequality
If there's a real national security threat tariffs might be appropriate, but given that we still produce 80% of our own steel I'm not convinced.
He missed a good opportunity with TPP.
These huge multilateral trade agreements hurt the US the most. They tie our hands and flexibility and benefit the other signatories more than us. Some problems with TPP:
Limit how U.S. federal and state officials could regulate foreign firms operating within U.S. boundaries, with requirements to provide them greater rights than domestic firms.
• Extend the incentives for U.S. firms to offshore investment and jobs to lower-wage countries.
• Establish a two-track legal system that gives foreign firms new rights to skirt U.S. courts and laws, directly sue the U.S. government before foreign tribunals and
• Demand compensation for financial, health, environmental, land use and other laws they claim undermine their TPP privileges.
• Allow foreign firms to demand compensation for the costs of complying with U.S. financial or environmental regulations that apply equally to domestic and foreign firms.
Taken to its logical conclusion, this all ultimately amounts to the idea that the profitability of investments must be the supreme priority of state policy—overriding health, safety, human rights, labor law, fiscal policy, macroeconomic stability, industrial policy, national security, cultural autonomy, the environment, and everything else.
China, among others, has a vast, growing middle class who aren't going to be satisfied keeping their standard of living down to enable cheap exports.
In case you haven't heard, China is not a democracy. The Chinese view their growing economic power as a way to gain control over the rest of the world. The global excess in steel capacity is 700 million tons, with China’s excess capacity exceeding the total U.S. steel-making capacity. The Chinese government subsidizes their steel and dump it on the US market at below cost. This is the way monopolies become monopolies. China is doing it on a global scale in many industries. They steal intellectual property and use that information to displace their competitors. It is all part of a long term strategy.
Protectionism has an impact but absent a trade war it's dwarfed by other factors like relative savings rates and strength of the currency.
There's a very strong argument to be made that as long as the dollar is the reserve currency of the world trade deficits don't matter to the US.
All those dollars we send overseas buying goods end up coming back to us in the form of foreign investment.
Why should we put up with the China placing a 25% tariff on our automobiles while we have a 2.5% on their cars?
How many Chinese cars do you see driving around on US roads?
Do you think there may be more to this than tariffs?
The EU is a similar size consumer market and we run a $151 billion deficit with them. The EU is far more protectionist using VATs and tariffs to protect their farmers and industries. How is this fair and why is it acceptable?
How does running a trade deficit with the EU harm us?
Because we want to protect American workers and their jobs.
There it is - the whole argument in a nutshell.
What you really want is a jobs program.
Instead of laundering the money to pay for it through a convoluted, market distorting protectionist regime why don't we let the American consumer buy goods at the lowest possible price - thereby raising their standard of living, and fund the jobs program via a general tax?
It's much more fair because you aren't picking favored industries, it's much more economically sound since you aren't artificially propping up industries which have lost their competitive advantage, and it's much more transparent - the taxpayers can actually see what they're paying to provide these jobs rather than having the taxes and the expense hidden in the cost of the goods they buy.
Cheaper goods from countries that in many cases have American companies located in them that are using cheaper labor and less restrictive controls (labor, environmental, etc.) and then export them back to America.
As I said, if another country is willing to reduce their standard of living and quality of life in order to sell us cheap goods we would be fools to turn them down.
Some of the most prosperous and vibrant times in US came when the US was more protectionist.
When was that exactly? When was America more prosperous and with a higher standard of living?
Some problems with TPP:
Of course no agreement is 100% advantageous to the US, but these agreements are how you reduce these tariffs and eliminate distortions.
Taken to its logical conclusion, this all ultimately amounts to the idea that the profitability of investments must be the supreme priority of state policy...
It isn't about state policy, it's about the priorities of capitalism.
Capital these days is mobile. We may not like the implications of that but it's reality and you aren't going to change it without taking authoritarian measures.
In case you haven't heard, China is not a democracy.
No, they aren't but their hold on the populace is tenuous - and always has been.
They're acutely aware of the needs of their people and will have no choice but to respond.