well we know what free trade has done for the American steel industry.
But the world has limits that Friedman ignores. He seems to assume reasonably good intentions on the part of both parties.
Suppose the other party undercuts our prices, ends up owning the entire industry, and finances our spending not by buying the stuff we make but by loaning us back what we spent. Then, when we are used to buying stuff without making anything to sell in return, they pull the rug out. We would be hosed.
Left alone, we'd eventually get back on our feet. But if the other party has nefarious purposes behind this, we certainly would not be allowed to do so easily.
Would China be hurt if this happened? Certainly, but it might be ok with their leaders as long as they ended up on top.
At the end, Milton asks why we should refuse foreign aid. Foreign aid doesn't have that good a history. It's worked a couple of times, such as Europe and Japan, but has a lousy record in other places and times. Checkout the book title (something like) "Confessions of an Economic Hitman". You want to be real careful about the terms of foreign 'aid'.
Milton is right about tariffs in a non-hostile world. But that's not always reality.
Toddster is back. Man were you wrong about gold...
End the Fed
China took 686 million bushels, or 23% of our total soybean production. Mexico was our second biggest buyer, taking 113 million bushels. Japan took 88 million bushels.
What's the point, here? Ultimately our exports must be paid for in dollars. The only way foreign purchasers of our exports can acquire dollars is to sell to us. If you limit imports with tariffs or other trade barriers, you're killing jobs in the export industries in which we're competitive worldwide.
You might want to argue that soybeans are not a very impressive export. Let's look at the aircraft industry. Boeing finally got their 787 Dreamliner out of trouble. The first airplane delivered went to All Nippon Airways. ANA paid for that airplane with dollars earned by Japanese firms exporting to the US. Stop those imports, and you kill jobs in the aircraft industry.
Finally, in defense of agriculture, in 2010 total US exports of agricultural products were $115.8 billion. There are three classical indicators of "high tech" industry: R&D as percent of sales; capital investment per worker; and value added per worker. US agriculture has high values on all three indicators. Next time you want to see a high tech industry, go look at your nearest soybean field, cotton field, or wheat field. Don't go destroying our high tech, world-wide competitive industries by "protecting" industries that can't compete in the world market.
The United States Constitution, Article I, Section 8:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;...To regulate Commerce with foreign Nations,...”
The Tariff Act of 1789 was the first national source of revenue for the newly formed United States.
Over 150,000 Chinese businesses and all Chinese banks are state-owned.