Posted on 03/16/2009 3:54:30 PM PDT by rabscuttle385
MEXICO CITY (AFP) — Mexico on Monday said it would place tariffs on nearly 90 US products after Washington canceled a program that allowed some trucks from Mexico to operate in the United States.
There is to be an "increase in customs duty on almost 90 industrial and agricultural products," Economy Minister Gerardo Ruiz Mateos said in a statement.
Ruiz said the increase would represent some 2.4 billion dollars, but did not name the products.
. . . . .
The move drew a sharp rebuke from US Senator John McCain, who said he regretted Mexico's decision and also lashed out at US President Barack Obama and lawmakers for backing "protectionist" policies.
"I deeply regret the action taken by the Mexican government and the harm it may cause to American businesses," said McCain, who lost his bid for the presidency in 2008 to Obama.
"Unfortunately, this is a predictable reaction by the Mexican government to a policy that now puts the United States in clear violation of the North American Free Trade Agreement," he added.
"We must take steps to prevent escalation of further protectionist measures -- actions that only serve to harm American business during these tough economic times when these businesses need a worldwide marketplace to prosper."
(Excerpt) Read more at google.com ...
I’ve experienced the flaming part.
I’m not saying Reagan did not believe in free trade. I’m saying he was not a purist. He was pragmatic and took many steps to protect US technology and industry. There was a reason that the union stiffs in this country loved him almost as much as us non union stiffs. That, despite him firing the Air Traffic controllers.
THIS! A thousand times, THIS!
That he was on the set of King of Queens
We have almost come full circle: now, "Reagan" Democrats are trying to convince us that free and open markets are not in our best interest, and expect their political leaders to help them take advantage.
The 27 Mexican carriers in the pilot program compiled an impressive safety record in 2008, judging by the rate at which randomly stopped vehicles received an "out-of-service" designation -- meaning they did not comply with all safety regulations -- from DOT inspectors. Whereas all U.S. carriers had a vehicle "out-of-service" rate of 21.6%, all Mexican carriers had a rate of 20.7% and Mexican carriers in the pilot program had a rate of 7.3%.
If that is true above, then what is Obama's real reason for this action? Legitimate trade with Mexico I am not against. We need their oil for one thing. If Obama feels it is security then why is Napolitano saying there isn't a problem but will review everything?
What I want is to know why Obama is making different policy. RIGHT now he has back tracked and is willing to rewrite the funding he stopped for this program.
http://www.freerepublic.com/focus/f-news/2207850/posts
Mod, sorry for the double post. Delete #106 please.
I understand that Japanese beef is frequently served in the White House.
And the Japanese have had 20% unemployment for the last 20 years. Not who I would emulate.
66 Billion,, about 2% of their GDP of 4.47 trillion. Thanks for proving my point that they import almost *nothing* if they make it domestically.
Let’s say your arguments are sound. Tariffs are not bad and targeted tariffs are even good. They can create jobs.
You’ll admit then that tariffs are like earmarks. An earmark takes taxpayer money and benefits a targeted or preferred constituent or constituency and a tariff does the same thing.
Now, you’ll likely object to the taxpayer money being lost in a tariff, but you’d be wrong. Imagine a tariff that protects Sen. Durbins favorite widget manufacturer - ACME Widgets. It targets “unfair” competition from say the Red Chinese who really want to corner the widget market in the world and the USA.
The Red Chinese so badly want the widget market that they allocate significant resources into it allowing RED Widgets (a wholly owned subsidiary of the PLA) to sell their widgets for $1.00. ACME cannot even come close to that. Their widgets at a 5% net profit margin must be sold for $10.00. Americans who used to only buy one widget a quarter now buy hundreds at the new RED widgets price.
What you have is the following: a misallocation of productive assets on the part of the Red Chinese into widgets. The money spent on capturing the widget market could have been used to make something else. In America you have a demand curve that literally moves outward due to the low price. Who gains?
Americans are delighted with their widgets. Widgets are good.
Now government is faced with a dilemma. ACME employs several hundred American workers. They will lose if ACME is driven out of business. Sen. Durbin places a special tariff on widgets raising the imported price by $9.00 and making it equal to the ACME Widgets price. Who gains?
Only ACME and its employees. All other Americans lose. They are now forced to accept less widgets or the same amount, but at an inflated price. The demand curve shifts back to “normal”.
Now we have no idea if ACME is poorly run. We don’t know if the owners have squandered resources that should have been moved into producing widgets at a lower price and more efficiently. ACME may have all kinds of ridiculous legacy costs or work rules imposed upon it making it uncompetitive. Nothing in the tariff will repair this, but it did just transfer American wealth back to Americans. Like shifting money from one pocket to another. No new wealth was created.
Under the previous regime, Chinese wealth was being transferred to Americans via the subsidy paid by Red China to its manufacturing arm Red Widgets.
Surely, you see that, right?
There is a third option, do nothing. What happens in this scenario?
ACME goes under (we are uncertain whether it is deserved, but it certainly came faster than it would have without the Red Chinese subsidizing their exports to the U.S.). All its workers are thrown out of work. What happens to them? Are they trapped in unemployment for the rest of their lives? Have jobs been “lost” in this scenario? Have they been “gained” in the pro-tariffs scenario?
What naturally happens is some will take other jobs paying the same, some less. Some will learn other trades or skills and move on to new industries.
The Red Chinese realize now is the time to strike. They raise prices on widgets to $20 as their is no competition. ACME’s old managers and some employees realize there is new opportunity and start a company and sell widgets at $10. Forcing the Chinese to drive prices back down. Eventually, we innovate because free competition encourages innovation and our prices drop.
Now the Chinese must choose to subsidize widgets or not. You cannot manage an economy. It is impossible.
Economy by the way really means household management. So when you talk about managing the economy you really mean manage the millions of individual households and all their economic decisions.
Subsidies cause harm to the nation that uses them. Tariffs reduce the wealth of the country that imposes them.
They imported about $700 billion in 2008. Thanks for proving my point that you’re a clown
So someone who disagrees with FDRs assertions about Smoot, is a leftist? Wow, most people think FDR was the leftist,,and disagreeing with him is,,oh, nevermind that. But* do you understand what is meant by the term *percentage*? 3% of the GDP then, is like, 3% of GDP now. I can see now why nobody can seem to get through to you.
That is pretty provincial. If it were that bad in all of Mexico you’d have the entire country within our borders in a matter of weeks.
Don’t exaggerate to make your point. You remind me of suburbanites who are afraid to go into the South Side of Chicago. Blacks just look different. They’re really nice people.
So are Mexicans.
You might be knew to FR econ threads, so let me tell you how it works: anyone who doesn’t cite to their authority is usually ashamed to cite to their authority.
Now you are talking. You have the right to stop buying Chinese and Mexican goods. It is a natural right to trade with who you want.
Please just don’t steal my right to trade with who I want, OK?
What's more significant, a 3% drop from a base figure of 100, or a 3% drop from a base figure of 1000? I can see why no one can get through to you, you're an idiot.
They should have been. Cabotage laws are unfair trade practices and we should want to get the lowest price possible all else equal.
Cabotage doesn’t save jobs it simply subsidizes them.
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