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The economist, Walter Williams, I think gives an inciteful perspective on this in this article:
http://www.townhall.com/columnists/walterwilliams/ww20030917.shtml

I'm sharing this with my economics students

Actually I have a request for any so called economist. Can you show one case where a tariff levied by the USA was on net harmful. I note this requires that the costs and benefits be studied with the same regreession analysis. In other words don't try to foist that Steel Consumer's study which does a use regression analysis on teh cost side but not one the benefirt side.

I believe there should be such a study somewhere out there because there are so many economists who are stating that tariffs are harmful someone must have done such research and proven at least one case. I note that there are proffs that several tariffs inb the History of the USA actually did provide a net economic benefit. Specifically, the textile tariffs of the mid 1800's. Further we have the following linked document that does provide such regression analysis here.

Clearly you would agree that decisions should be made on the best available evidence and using tariffs against Chinese goods at this time is more than justified for that specific nation at least under the rationalizations for tariffs Adam Smith recognized.

Here is a reaqsonable approach to fix things.

Acknowledgement RDB3 who helped hammer out this plan.

In no particular order of importance.

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.

3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.

4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.

5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize that may be overreaching. It must be stated for clarification that simply being in the geographic area of the zones does will not subject any company to any new mandatory regulation. Everything is voluntary for getting the exclusion from corporate taxation. The profit attributable to direct imports is subject to the same rules that exist everywhere else in this nation for corporate taxation. Only free from such taxation is the profit attributable to American content and any American improvement. In short no new mandatory regulation will be a part of this. It is my opinion that there will not be a lack of companies seeking this tax relief. And no the regulation implied is absolutely minimal in order to get this through.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.

8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.

9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.

10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.

11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage.

Now since I started posting this plan another idea has come up that in my opinion is a very good policy that stands on its own. Now I give credit to Jim Gibson and Freeper Ed_in_NJ for coming up with the idea, separately to the best of my knowledge. However I can be corrected on that. The tariff phrasing is from Jim Gibson.

“I suggest that the US Customs Department charge a $1,000-per-container inspection fee on every container entering the United States. This fee would be used to completely fund the cost of inspections. If we assumed that a four-man team could fully inspect two containers a day or about 500 per year, it would require 48,000 inspectors. Allowing for at least 2,000 support personnel, we would need at least 50,000 workers. Because these workers would require high intelligence and skill levels they should earn at least $30 per hour. At 40-hour weeks plus benefits, I estimate the cost per worker to be over $75,000 per year, all paid by the foreign manufacturers. Even so, this would still leave over $2.25 billion to cover all other costs. Any revenue not used would be used to compensate American workers displaced by foreign imports. “

I urge and encourage everyone who agrees with this plan and or the terror tariff idea to communicate this to every politician you can think of.

I am a hundred percent familiar with William's arguments. Paul Craig Roberts says Pareto first argued that Adam Smith's arguments that industrialization and specialized labor would increase national wealth should be applied to the world as a whole, increasing world total wealth.

I am not sure he is right, didn't Cobden predate Pareto? (Cobden led the charge in England for repeal of the Corn Laws and as low import tariffs as possible.)

The reality is not economic, however, but political. The trade with East Asia will result in the Left taking power in the United States unless there is a steady increase in employment before the next presidential election. On the long term we obviously cannot export all manufacturing without becoming a natural resource and agricultural economy. The plea that China respect "intellectual property" will not stop the service industries collapsing with the collapse of the American employment.

We are, on the other hand, moving towards an equilibrium marked by a collapse of the dollar associated with the international rejection of the dollar as a reserve corrency. This has many ramifications. As I read the tea leaves the Chinese are banking on it.

The reality of the situation is that half of Americans have a less than the median American intelligence and cannot compete with the world's best minds except with the labor of their hands. Forcing these people to compete with Asian labor directly will force an equilibrium of Asian manual labor and American manual labor wage rates. At the very least this would cause the election of "a man on horseback". I do not see how this can result in other than a command economy.

If you are interested in economic arguments against William's position Paul Craig Roberts is well noted for his public criticism of William's point of view.

Economics does not operate in the intellect but in the real world of politics. It is intellectually fun to work with, and I love searching data sets statistically, but it exists in a real world of human beings. We cannot escape taking human nature into account.

The best classical "economics" book dealing with human nature is, IMHO, Mackey's _Popular Delusions_. (I am of the school that "man is not a rational but a rationalizing animal."!!!)