I agreed on all points.
“Tariffs and protectionism are not only exercises in futility but typical examples of how a country shoots itself in the foot.”
Tariffs make foreign goods more expensive, which hurts consumers. When all is considered, trade is reciprocal. If we buy less, others will buy (or borrow) less from us. Imports go down, but so too exports.
Other countries enact tariffs or other protectionist measures. They are not helping their citizens by keeping out foreign (including US) goods that their citizens would have bought.
They are doing something stupid that harms everyone. Should we retaliate by doing something stupid that hurts everyone? No.
“Tariffs and protectionism do not address the underlying causes of business and industry fleeing the U.S.”
Very good point. They are a big distraction.
Here are some other places to look. Are union wages/benefits too high when there are many who are unemployed? How much do we gain from job-killing environmentalism? Does our Federal tax system work against American workers? What are trade impacts of Federal deficits? I’ve been thinking about this last question ever since Walter Williams mentioned it.
The Japanese and Chinese are major purchasers of US government bonds. I guess we pay a pretty good interest rate. One could argue that the reason they have to sell us so many goods is that they must in order to buy our debt! A more solid (yet abstract) statement is that the exchange rate value of the dollar is as high as it is because foreigners want to buy our debt. If government controlled spending and did not borrow, the value of the dollar would fall. A 20% fall in the value of the dollar would have the same impact on imports and exports as a 20% tariff.
And I forgot another relevant problem: open borders. This is mostly a sovereignty/national security problem, but it does have an economic dimension.
Americans should not have to compete with foreigners on US soil. It is one of the perks you get as an American citizen.
Amen. Here is a re-post from #13 further on these points...
The root cause of losing our businesses is the FEDERAL GOVERNMENT. The federal government has created an unfriendly business environment in the U.S. with boneheaded policies like
- minimum wage - artificially high labor costs are killers of jobs and send companies elsewhere
- taxes
- regulations
- federal protection of unions
Again, the issue is the unfriendly American business environment and weak American competitiveness caused by the skyrocketing costs of doing business due to GOVERNMENT INTERFERENCE like taxes, minimum wage, regulation, and unions. When those things are addressed, business will WANT to return/stay because of cost benefits.
Let the voluntary cooperation of the market economy free of government interference work. Don’t layer more government interference upon that which is the root cause to begin with.