Thomas Sowell: Manufacturing confusion

The real point is that the rest of the world will not accept a world trading regime that disproportionately benefits US firms. Many threads on FR advocate the unilateral raising of US tarriffs as the panacea for US competitiveness problems. Such a simple-minded approach won't work.

The recent rise in steel tarrifs were a perfect illustration in microcosm of short-sightedness of this approach. Big Steel in ths US is not competitive in the world market for a variety of reasons almost all of which are homegrown. Currency values account for perhaps 10% of the problem. The result of this exersize in protectionism was that domestic consumers of steel were punished and made uncompetitive and the rent-seeking managers of Big Steel were rewarded for their lobbying skills rather than upgrading their plant and equipment. This was, I submit, a disaster.

Until the US reigns in its out of control lawsuit culture, reforms its corporate tax regime and begins to take business competitiveness seriously we will continue to lose jobs to more nimble foreign companies.

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