If This Is A Trade War, Sign Me Up

National Economics Editorial ^ | March 23, 2018 | Dylan Scott

[LibertyFound]

We’re Off To A Good Start In The “Trade War”

Yesterday, the Trump administration slapped $60 billion in tariffs on Chinese imports. The tariffs are intended to protect American innovation and competitiveness in the global market. In response, China put retaliatory tariffs to the tune of $3 billion on US imports early Friday morning.

Trump also indicated that this will be the first of many economic actions the White House will take to combat China’s unfair trading practices. Watch below:

As this editorial has argued since it’s inception, tariffs are a good thing and are in fact necessary to bring the US back to a state of autarky. If these tariffs in the recent days are any indication, the US will be fine even if a so-called “trade-war” does erupt.

Trump’s Tariffs Target The Right Things

For starters, the tariffs President Trump’s administration adds are mainly on products advanced industry sectors, such as aerospace, information communication technology, and machinery. This is the right target for a litany of reasons which we have written extensively about, however outside perspectives are helpful, such as Greg Ip’s from the Wall Street Journal:

[DannyTN]

I’m really starting to like the National Economics Editorial!!!

[Socon-Econ]

The author wants to sign himself up in his trade war. But he’s also signing me up —involuntarily — when I buy anything made of steel, aluminum, etc. He’ll also be drafting into his war the companies and workers who will be hurt by the inevitable retaliation.

[cba123]

I just came back home to America from Asia.

Most people here have no idea, the degree to which our manufacturing abilities have been negatively impacted by THE LAST THREE administrations in America (maybe even more) selling out America by encouraging foreign production of everything.

It is high time to build up our own country for a change.

[cba123]

America has been the sole victim of the global economic war being waged for the entire last twenty years.

It is high time we had a leader who supports businesses in America.

[DoughtyOne]

100% of the FReep-a-thon goal has been reached. Thank you for supporting the forum folks.

[Robert DeLong]

Not really. When companies start returning to America more people will become employed instead of depending on government handouts. In turn our indebtedness to foreign countries becomes less. Debts to foreign nations weaken the value of the dollar, which are unseen taxes on everyone, as do rising numbers relying on government handouts. You do not climb out of your problems by allowing every country in the world to take advantage of you economically. More companies increase competition for workers, which result in higher salaries. You totally miss the bigger picture because of your extremely narrow focus. Especially in the very short term.

[central_va]

Tough shit.

[bert]

-—In turn our indebtedness to foreign countries becomes less-—

You are wrong totally wrong. The balance of trade deficit is between an American importing purchaser and a foreign exporting vendor. There is no sovereign obligation at all. There is no indebtedness incurred by the American government.

As a matter of fact, almost all foreign trade transactions are for cash with payment by letter of credit or terms of less than 90 days. Transactions for very large and costly items may require debt but that is handled between banks. In some circumstances, the bank and seller might obtain insurance that is provided by a government agency.

When Target buys and pays for items from say Taiwan, Target engages in a transaction resulting in a payment to a Taiwanese business. If the aggregate of all such transactions is greater than the aggregate of sales by American companies within a set period, say one year, to Taiwanese companies there is a balance of payments deficit to Taiwan.

When sovereign nations become American creditors it is the result of purchasing US Government Bonds. The sovereign debt is in no way related to trade. US government bonds are very desirable because they are perhaps the safest investment on the planet

[Robert DeLong]

Oh but there is, because more resources are spent in safety net mode, and that expanding safety net mode means even more resources, which means more government borrowing, via bonds which also pay an interest amount, to spend. In addition, companies & factories lost means declining revenue streams to the government, and the issuance of even more bonds, bert.

So yes, while you are technically correct, you miss the impacts of that trade imbalance, which in turn increase foreign indebtedness by our government.

[bert]

You overlook the strength of our manufacturers and their very strong export markets that will actually be improved and strengthened. The weaknesses you perceive are illusions.

The point of the Trump effort is to create jobs by making our products more competitive at home and on the world markets.

I say world markets rather than global markets because the Economic troglodytes will flog me for being a globalist

[Robert DeLong]

Over 12.3 million Americans are employed in the industry. But it's not the powerhouse it was. In 1960, about one in four American workers had a job in manufacturing. Today fewer than one in 10 are employed in the sector, according to government data.Mar 29, 2016

Yeah I see what you mean. /sarcasm

[bert]

You incorrectly assume a static world and fail to realize that the condition of which you glowingly remember was historical anomaly.

The condition you remember was the result of winning WW II and those countries that mattered were pretty much destroyed and their manhood severely deteriorated. In say 50 years, that changed. We no longer were the only capable country. We could not compete and maintain the status quo. Business chose to compete and did so.

That choice precipitated change

[Robert DeLong]

That choice precipitated change

And a bad choice it was. They sacrificed our industries for the sake of globalists & cleaner service jobs leaving us as primarily a consumer nation with growing unemployment problems. In addition they caved to political correctness creating a generation of uneducated social justice warriors who have become uncertain as to their own gender.

I could go on, but really do not have the time or inclination to delve deeper into the issue at this point in time. I'm all for free trade, but we haven't had real free trade for decades, just unfettered trade, and most of it one way.

[bert]

Like central_va, you continue to spew the ‘30s style isolationist anachronisms of a by gone anomaly

[Robert DeLong]

While you keep spewing the moderate view that has led to the road to ruination for this country. The definition of insanity is to keep doing the same thing over & over expecting different results. No one is talking isolation, except you. I am for trade, but not for trade that continually erodes this country.

[bert]

The country is not ruined

That is specious and fallacious.

[Robert DeLong]

Your comprehension skills need work. I said headed for ruination.