Posted on 02/19/2016 6:56:22 AM PST by Kaslin
Republican hawks are aflutter today over China's installation of anti-aircraft missiles on Woody Island in the South China Sea.
But do these Republicans, good free-traders all, realize their own indispensable role in converting an indigent China into the mighty and menacing power that seeks to push us out of Asia?
Last year, China ran up the largest trade surplus in history, at our expense, $365 billion. We exported $116 billion in goods to China. China exported $482 billion worth of goods to us.
Using Census Bureau statistics, Terry Jeffrey of CNSNEWS.com documents how Beijing has, over decades, looted and carted off the greatest manufacturing base the world had ever seen.
In 1985, China's trade surplus with us was a paltry $6 million. By 1992, when some of us were being denounced as "protectionists" for raising the issue, the U.S. trade deficit with China had crossed the $10 billion mark.
In 2002, it crossed the $100 billion mark. In 2005, the $200 billion mark. In each of the last four years, Communist China has run an annual trade surplus at the expense of the United States in excess of $300 billion.
Total trade deficits with China in the Bush-Clinton-Bush-Obama era? $4 trillion. Total U.S. trade deficit in 2015 -- $736 billion, 4 percent of our GDP.
To understand why Detroit look as it does, while the desolate Shanghai Richard Nixon visited in '72 is the great and gleaming metropolis of 2016, look to our trade deficits.
They also help explain America's 2 percent growth, her deindustrialization, her shrinking share of the world economy, and the stagnation of U.S. wages as manufacturing jobs are replaced by service jobs.
Those trade deficits also explain the rise of Bernie Sanders and Donald Trump.
Yet, with the exception of Trump, none of the GOP candidates seems willing to debate, defend or denounce the policies that eviscerated America -- and empowered the People's Republic.
Workers, however, know what our politicians refuse to discuss.
They are being sold out for the benefit of corporate elites who pay off those politicians with the big cash contributions that keep the parties flush.
Politicians who play ball with Wall Street and K Street know they will be taken care of, if they are defeated or when they retire from public office, so long as they have performed.
Free trade is not a zero-sum game. The losers are the workers whose jobs, factories and futures are shipped abroad, and the dead and dying towns left behind when the manufacturing plants shut down.
America is on a path of national decline because, while we have been looking out for what is best for the "global economy," our rivals have been looking out for what is best for their own nations.
Consider OPEC, which is reeling from the oil price collapse. Russia is colluding with Saudi Arabia and Iraq to cut production to firm up the market and prevent prices from falling further.
This is pure price fixing, but we all understand self-interest.
What might a U.S. national-interest-based trade policy look like?
Controlling the largest market on earth, we might impose on foreign producers a cover charge, an admissions fee, a tariff, to get into our market.
Example: Impose a 20 percent tariff on foreign cars entering the USA. This might raise the cost of a Lexus or Mercedes produced and assembled abroad from $50,000 to $60,000.
However, if Lexus or Mercedes buys or makes all their parts in the USA and assembles all their cars here, no tariff. Their cars could still sell for $50,000. This would be a powerful incentive to shift production here. As an added incentive, all tariff revenue could be used to reduce or eliminate corporate taxes in the USA.
Between the Civil War and World War I, under Republicans, the U.S. became the world's greatest industrial power and a wholly self-sufficient nation. How? We taxed foreign goods entering the United States, but did not tax the profits of U.S. companies or the incomes of U.S. workers.
The difference between economic patriots and globalists who inhabit corporate-funded think tanks and public policy institutes is that the latter think of what is best for their corporate benefactors and the global economy. The former put America and Americans first.
Academics revere Adam Smith, David Ricardo and Richard Cobden.
But none of them ever built a great nation. Patriots look to Alexander Hamilton and those post-Civil War Republicans who built the greatest national industrial powerhouse the world had ever seen.
Indeed, what great nation did free trade ever build?
As father of a united Germany, Chancellor Bismarck said, when he decided to build Germany on the American and not the British model, "I see that those countries which possess protection are prospering, and that those countries which possess free trade are decaying."
So it is true today. Unfortunately, it is America, now wedded to the fatal dogma of free trade, that is decaying.
Did you check this link out?
Duty Calculator - Country Guides
It looks like German puts the 19% VAT tax on most all imports, plus other duties on other items. That assesses imports with a tax domestic German companies incur as value is added in the manufacturing process. I guess we could calculate labor and environmental costs our domestic producers have which are not incurred in cheap labor nations and call it a Comparable Labor and Environmental Tax, the CLE tax on imports, then we wouldn't have any tariffs on imports, just as Germany doesn't.
I think most or all the EU assess the VAT on imports from outside the EU. Someone really needs to put all these trade disadvantages the US must deal with in a form people could grasp. Or maybe they don't want it so people understand what's really going on.
The federal income tax was also a gift of trade protection. Republicans agreed to support the 16th Amendment in return for democrat support of the Payne Aldrich tariff they so desperately wanted. Trade protection has consistently screwed the economy, the taxpayer, and the consumer. Yet conservatives on this thread demand more of it. Go figure.
“This nation would be far better off financially producing most of its own goods and services and having a true, high employment rate, and several hundred billion annually less spent on poverty programs.”
So the more we pay for the goods we want, the better off we will be?
“America is dying. It’s time for people to wake up before it’s too late.”
That maybe true but PJB’s cure only makes things worse.
“The cost of the goods doesn’t change because if the companies OUTSIDE the US have to pay the tariff fee, they are just as well off to build the product here.”
BS. The only way tariffs would work in keeping high wage jobs within the US would be if the tariffs were sufficiently high enough to increase the price of goods made outside the US to where they would cost more than the price of goods made in the US.
Of course, then the unions use the high prices of overseas goods to justify more wage increases. Then we would have to raise the tariffs again. Then the wages again. Rinse, repeat.
PJB’s solution is nothing less than the theft of the hard earned income of the average american.
So, the more unemployment we have, and the more spent on anti-poverty programs (already a trillion plus annually), the better off we are?
And "free" traders think the one-sided deals provide cheaper products to consumers?
Are you blaming cheap products for increases in welfare?
The raise the price on IMPORTED goods.
Would a tariff on imported commodities raise the price of domestic commodities?
Stop equating Chinese businesses with American. We absolutely want to raise the price of Chinese goods through punitive tariffs. Raise costs to consumers? You bet, that's the whole point, genius.
No one is forcing you to buy those products. You can always buy from your countrymen....but a guy like doesn't really have one, do you?
Just a little island...wafting through Life in a pristine little bubble, always keen to find the next scam, the next hustle...Loyal to no one, and none to you.
Isn't that it, bunky? You just don't fit. Never did. All those people around ya...objects. Inscrutable. Why don't they leave you alone, so you can search the world for a cheaper pair of shoes? If only they would let you live, all by your lonesome. But of course you require them to stand an Army up to defend your isolation. You require them to erect and maintain a system of property to keep you in Splendid Isolation. And a system of education so you can obtain all these values and insights. And of course property rights so you - individually, personally - can mine the ore (no one else of course, just you), smelt the steel, and build the car...that someone else invented.
Yup, you're all alone: Just Economic Unit No. 136. No connection to anyone, anything...except when you need to eat, sleep, breed...then we all gotta pitch in to create the infrastructure around you to achieve this wondrous goal of your Splendid Life.
You know, since we all don't meet your expectations along these lines, you could move where the Stuff is Cheep: China or Mexico or Bangladesh.
I'm sure they'll take you in with open arms.
OK...Fine...We’ll just go on as we have been...Business (or lack of) as usual...
When there are no jobs in this country except low paid, uninsured service jobs, we can see how far down it’s gone...Then, those will disappear when no one has anything to pay for their service...Everyone will be on the government dole, just like Bernie wants...
Oh wait...There won’t be any government dole then because there are no longer any taxpayers for the government to steal from...
Why would it???
I understand your economic theory here. But, it lacks one thing, perspective of what other countries do.
If all countries were roughly the same with a multitude of economic variables, free trade works great. But, I want to hear you address the realities within this theory.
For instance, some countries have a combination of advantages that aren’t considered. Tell me your plan on dealing with : nations who have large state subsidies to industry, large pools of relative slave laborers that nobody can compete with, state sponsored R&D targeting manufacturing and high technology industry, tariffs on US good that are imported.
I’m not being facetious, What are the options to deal with these problems. I mean if there is no serious answers, then it seems reasonable to Trump it. And his plan is to negotiate using the leverage of doing what they are doing to get this problem rectified.
“So, the more unemployment we have, and the more spent on anti-poverty programs (already a trillion plus annually), the better off we are?”
Every time a state or municipality has implemented rules requiring able bodied welfare recipients to work for their welfare checks or attend mandatory job training, the welfare rate has gone done. Why? Because many already have jobs. Having to report to specific places for training means they can’t go to their regular jobs. Then they don’t show up for training or to work.
How about we clean up the welfare roles before we try to use that to justify tariffs?
Wrong...Please read...
http://americastradepolicy.com/did-the-smoot-hawley-tariff-cause-the-great-depression/#.VseAhuaLXFl
The big problem with Smoot-Hawley Tariff Bill was that US export income was pretty close in value to US import value...When we raised to tariff on imported goods, the foreign countries also raised theirs...It served no purpose...
Today, our export income is 6 times lower than US import value...
“When there are no jobs in this country except low paid, uninsured service jobs, we can see how far down it’s gone...Then, those will disappear when no one has anything to pay for their service..”
About 150 years ago, almost 80% of the population worked on farms. By your reckoning, we should be starving now because we didn’t do anything to save those great paying farm jobs.
Yes..........
Man, are you lost....*LOL*
I was specifically responding to an earlier post that dealt with the driving forces of Germany’s immediate post-WWII recovery.
But since you brought up the VAT, it is essentially a multi-level sales or excise tax - not a tariff. The VAT applies to all goods sold in Germany, regardless of where they are produced. The same is true for sales taxes in the U.S. If you buy a Japanese-built Lexus in Georgia, for example, you will pay the same state and local sales taxes as you would if you bought a U.S.-built vehicle. If we adopted a VAT, which many here on FR advocate, our VAT would undoubtedly apply to imported goods as well as domestically manufactured goods.
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