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Protectionism can make a lot of sense in certain situations, but I’m curious about what is a reasonable desired outcome for engaging in a trade war with virtually every major trading partner of the US in a short amount of time. There’s certainly a trade deficit, but that’s the value of imports versus exports and there is a very substantial amount of value in our exports even if it is at a net deficit.
Meanwhile, there is relatively little in exports that we create that do not have alternative sources and our trading partners are not putting anywhere near the amount of new tariffs upon each other. I’m just curious to see if there are any studies that have outlined what the benefits are to engaging in this on not just a few partners, but with a multitude of them simultaneously.
I expect that certain measures will have a positive effect on some goods produced domestically in terms of driving down their price in the domestic market, but it seems likely that would be as a detriment to the producers themselves. Are these benefits predicted to outweigh the negatives?
A trade war is a means to an end, not the end solution.
Nobody WANTS to stay in a trade war. Trump is correct for wanting fairer trade policies, and sometimes getting governments to change their ways involves forcing them out of their comfort zones.
Yes, American history from 1789 to the 1950s, a time period during which America went from a nobody to the world’s economic superpower...a time period in which tariffs averaged 40%...a time period in which tariffs supplied half of federal revenues...a time period in which imports never ceased flowing nor was that the intention, as that would eliminate revenue.
Yes, American history from 1789 to the 1950s, a time period during which America went from a nobody to the world’s economic superpower...a time period in which tariffs averaged 40%...a time period in which tariffs supplied half of federal revenues...a time period in which imports never ceased flowing nor was that the intention, as that would eliminate revenue.
History has more than one perspective if going by results:
"Meanwhile in Canada, Liberal Prime Minister William Lyon Mackenzie King was watching the scene in Congress, but like many Canadians both then and now, he was unconvinced that an aggressive tariff would ever really come to pass. The Liberals had faced tariffs before, after all—notably on wheat, dairy and cattle—and Canada had survived. But Smoot-Hawley was much more aggressive, and even the Americans were divided. Maclean’s ran a piece in August 1929, which repeated a quote from a U.S. paper: “Isn’t there enough hatred of America in the world already without whipping it up more?”
Smoot Hawley:"Henry Ford called it an “economic stupidity”; more than a thousand economists signed a letter opposing it, and Thomas Lamont, a J.P. Morgan partner and financial advisor to the president, blamed it for sparking nationalist sentiment all over the world. Its opponents feared that the Act would erode goodwill and provoke retaliatory tariffs, spreading protectionism around the world. That did indeed happen: Germany, for example, attempted to turn their economy into autarky, closing it off as the country strove for self-sufficiency.
America circa 2018 repeating the folly of 1930....is anyone really surprised?
"Meanwhile in Canada, Liberal Prime Minister William Lyon Mackenzie King was watching the scene in Congress, but like many Canadians both then and now, he was unconvinced that an aggressive tariff would ever really come to pass. The Liberals had faced tariffs before, after all—notably on wheat, dairy and cattle—and Canada had survived. But Smoot-Hawley was much more aggressive, and even the Americans were divided. Maclean’s ran a piece in August 1929, which repeated a quote from a U.S. paper: “Isn’t there enough hatred of America in the world already without whipping it up more?”
Smoot Hawley:"Henry Ford called it an “economic stupidity”; more than a thousand economists signed a letter opposing it, and Thomas Lamont, a J.P. Morgan partner and financial advisor to the president, blamed it for sparking nationalist sentiment all over the world. Its opponents feared that the Act would erode goodwill and provoke retaliatory tariffs, spreading protectionism around the world. That did indeed happen: Germany, for example, attempted to turn their economy into autarky, closing it off as the country strove for self-sufficiency.
America circa 2018 repeating the folly of 1930....is anyone really surprised?
Ah yes, the Smoot-Hawkey Argument. You realize, of course, that we were in a severe economic depression at that time and virtually no economic policy could have reversed that.
...well, except a world war, which did reverse that since it destroyed the economy of Europe and revived the US economy.
Also, why do the tariff opponents never want to talk about the dozens of tariff acts which were successful, including the first one, which was passed before the Bill Of Rights?
YOU DO REALIZE, that everyone,including ALL THE NATIONS, came together to make it all “Fair Trade”, not Free Trade. Free trade takes no other country into account as to child labor, environmental issues, slave labor etc. etc.etc. Fair Trade protects and serves, or that is the intention. If Trump thinks he can’t BETTER the trade deals everyone worked so damn hard by EVERYONE ELSE, not just his enemy Obama....then he doesn’t have to KILL EVERYBODY AND EVERYTHING, and then MAKE IT LOOK LIKE HE ACCOMPLISHED SOMETHING. He didn’t. The work was already done, if it need tweaking, don’t make it into a big FEDERAL BLACK MAGIC MARKER PRETEND SOMETHOING.
Geez, 60s. Turn off the caps lock and loosen up the pu$&y hat. Most of us don’t mind bending over backwards to help the less fortunate, but we’re a tired of bending over forward, which is what we did for 8 years prior to President Trump.
If you want to make an omelette you gotta break a few eggs.
A trade war is a means to an end, not the end solution.
Nobody WANTS to stay in a trade war. Trump is correct for wanting fairer trade policies, and sometimes getting governments to change their ways involves forcing them out of their comfort zones.
A trade war is a means to an end, not the end solution.
Nobody WANTS to stay in a trade war. Trump is correct for wanting fairer trade policies, and sometimes getting governments to change their ways involves forcing them out of their comfort zones.
Oh, I understand that. I think it definitely makes sense in some instances to enact protectionist policies. I'm asking specifically about this strategy we're embarking on currently. What are the studies on its believed effects of engaging in a trade war on this many fronts simultaneously? Certainly a lot of policies are a means to an end and trade wars have been successful in the past in many situations, but it seems that we've put ourselves in an interesting situation of having started it on multiple fronts simultaneously so what is the projected reasonable results for it in the immediate short term and longer near term?
I think wanting fair trade policies is a good goal. I'm curious about what the projected outcome of our current strategy is. We're nowhere close to being a majority of the world's economy and there is scant few of our goods, especially any essential goods, that are not possible for our trading partners to substitute from other countries as far as I can tell. With that, what are our actual projections then? There must be some kind of at least immediate near term numbers as it's probably extremely difficult to project past that.
In the current trade dispute with Canada, the US &S has a trade surplus (surplus not deficit ) has on average higher tariffs than does Canada and has a written trade treaty.
So what more do you want from Canada? Was it unfair that Canada is allowed to have tariffs on American goods when the US has tariffs on Canadian goods? How large of a trade surplus do you need to have with Canada before it is considered fair? And lastly, if existing trade deals are not honored by your President why should Canada, or any nation for that matter, expect the US to honour their agreement?
As a Canadian I would not trust a single deal or commitment made by President Trump with our government. Trump claimed that the US ran a deficit with Canada speaking to Trudeau and then admitted he never even knew because he hadn't looked it up. If you wish to deal with other countries 9n his comments rather than facts then maybe you too are not interested in fair trade but in bullying and sabre rattling.
Go check the US government site on trade balas wirh Canada.
Ah yes, the Smoot-Hawkey Argument. You realize, of course, that we were in a severe economic depression at that time and virtually no economic policy could have reversed that.
...well, except a world war, which did reverse that since it destroyed the economy of Europe and revived the US economy.
Also, why do the tariff opponents never want to talk about the dozens of tariff acts which were successful, including the first one, which was passed before the Bill Of Rights?
Exactly! We have certainly had successful tariffs in the past and engaged in what are more or less successful trade wars. I always feel like I need to put "war" in quotes, but that's going to get tiresome.
The part that seems novel is that we are engaging in a trade war on so many fronts simultaneously in a short amount of time, but I also don't see us as a strong exporter of any inelastic goods for any of these countries. In that case, I'm wondering how we've accounted for this and what our projections are. I think these would be important in order to understand and plan around what industries will need to be domestically buffered in the meantime. There must be something out there to signal what the projections are even though the counter-tariffs seem to be popping up left and right. Certainly we must've accounted for the counter-tariffs as part of the whole endeavor if we were so decisive in moving on tariffs over such a broad spectrum in short time.
Surely, there must be a plan, because it would seem a poor overall strategy to engage on so many fronts of a trade war simultaneously without a decent confidence interval for positive results for American industry and American people in that strategy.
Last edited by OyCrumbler; 07-05-2018 at 05:44 PM..
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