Having spent quarter of a century in design and manufacture of large machinery in the United States, IMHO tariffs on imported machinery will bring back thousands of HIGH PAYING jobs lost to countries like China, Japan and others who subsidize their exports with cheap loans from their governments.
Our customers loved our machines based on past experience and our fast service, but my company could not compete with the near zero interest rate loans to buyers from those countries. Most of Our machines cost multiple million US dollars and without financing many buyers were forced to buy imported machinery.
Any tariffs on such machines will seldom put money in government coffers because buyers will buy indigenously manufactured goods which means there will be few imports to collect tariff tax on.
What it boils down to is tariffs must be very selective. Do not tax cheap stuff which can be manufactured with mass production such as one finds in Walmart. That will simply raise cost of living without creating many high paying jobs.
Business and businesses have fled the U.S. because the Left has created such an unfriendly business environment. The cause of our economic problems is none other than THE FEDERAL GOVERNMENT which tariffs absolutely fail to address and in fact, make matters worse.
Below is an explanation as to why U.S. protective tariffs make matters worse using the auto industry as an example, which issues are basically true for most American industry in general and manufacturing in particular.
Protective tariffs do more harm than good, penalizing the American consumer and lowering our standard of living by appearing, but actually failing, to attack the REAL reasons for our economic and competitive malaise - a palliative, not a curative, measure making matters worse. In the case of autos, tariffs would increase costs to American consumers by forcing taxes (tariffs) on incoming foreign cars while doing nothing to address the underlying causes of Detroits demise.
Protective tariffs are like shooting yourself in the foot. If another country shoots itself in the foot with tariffs, why should we follow suit?
Why is there greater demand both here and abroad for foreign cars than American cars? Is it because the big bad foreign countries have subsidized their cars or put tariffs on American cars? No, it is because American cars are famously inferior in quality in general to foreign cars. Why are American cars inferior to foreign cars? Why is Detroit a ghost town now? Is it because of those nasty foreign counties subsides or tariffs? OF COURSE NOT!
The REAL reasons foreign autos out-compete American autos began in the 60s and 70s when the fat-cat manufacturers in Detroit ignored warnings that foreign auto makers were innovating their engineering and manufacturing techniques. Detroit got lazy and did not want to be bothered until, as the story goes, one day an executive on a trip to the west coast in the 70s was stunned to see so many Japanese cars on the road.
So the first reason for inferior American auto products was LACK OF COMPETITION.
When Detroit finally saw they had real foreign competition, it ran into another big problem unconstitutionally federally protected unions. UAW contracts bound and gagged the Big Three with costs and obligations that fatally restricted their ability to innovate and compete https://cei.org/2013/07/29/empire-of-rust-how-the-uaw-killed-detroit.
So UNCONSTITUTIONALLY FEDERALLY PROTECTED UNIONS were the next reason for inferior American products that could not compete.
So what was the reaction? Of course, more government. In business, if you fail, you correct or die. In government, if you fail, you just call for more money and more government and you end up with an even greater degree of failure.
So what has government done? Imposed suffocating HIGH TAXES, unconstitutional dead-end REGULATIONS, unconstitutional business-and-job-killing FEDERAL MINIMUM WAGE, and engaged in basically unconstitutional SUBSIDES (BRIBES) FOR SPECIAL INTERESTS. They also stupidly DESTABILIZE & DEVALUE THE DOLLAR. Result? A greater degree of failure.
THE FEDERAL GOVERNMENT, not the EU, China, or the Man in the Moon, is the MAIN reason for our failure to compete in the marketplace. Federally protected unions, high taxes, regulations, minimum wage, subsidies, and a weak dollar all have converged to bind and gag American business and drive industry from our shores. Kill these mostly unconstitutional and boneheaded acts and policies and youve gone a long way to fixing the problem. Trump has directly addressed some of these problems. ALL need to be abolished.
In the meantime, what do protective tariffs accomplish besides penalizing the American consumer and lowering our standard of living? It restricts open competition. And NO COMPETITION was the problem in the first place. More government creating more of the same old problems.
Economically-meddling government creates poverty. The market economy free from government interference creates wealth. Open competition in the free market drives innovation, lower cost, and higher quality in the free market. The American economy and consumer win with open competition in the free market. American industry (not special interests) wins when it is free from the feds.
As far as trade imbalance (or trade deficit) goes, imports exceeding exports is not per-se a bad thing but is one of the many oft-used scare labels that is not very well understood. Simply put, we all engage in a trade deficit on a regular basis when we go to the grocery store. They get our money, we get groceries. Do we go away thinking, Oh no, Im suffering from a trade deficit with the grocery store.? Of course not. We got what we wanted and ofttimes, if were lucky, certain imported goods that are the worlds best. A countrys superior natural resource is often the reason that country produces the best type good anywhere. Trade deficits do not state an economic problem per se. Failure to openly compete in the marketplace because of government interference is absolutely an economic problem.
Lets get smart.