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Posts Tagged ‘protectionism’

Protectionism Is More Idiotic Than It Looks

Posted by M. C. on November 22, 2024

Customs agents took to the ramparts to protect Americans from TV Ducks — cotton products made to sit on the arm of a couch and hold a TV remote control. Robert Capps, who owned a small company in Skyland, North Carolina, ordered a large shipment of the products from China — but the Customs Service prohibited their entry in 1995. Customs claimed that the little novelty items belonged in the same tariff category as bedspreads — and thus that Capps needed a textile import quota before he could import them. No U.S. company was making TV Ducks, but Customs officials were hellbent on protecting American consumers from the product.

Protectionism Is More Idiotic Than It Looks

by James Bovard

Donald Trump’s re-election assures that protectionism will become even more fashionable inside the Beltway. Trump recently declared that tariff is “the most beautiful word in the dictionary,” and the exaltation of trade barriers has become the latest political mania. Washington hustlers are loudly promising to enrich the nation by selectively blockading American ports. Unfortunately, the Trump team and the growing horde of protectionist pundits sound clueless about America’s long record of trade follies.If the government cannot even intelligently and consistently define an athletic shoe or phone booth, how likely is it that government trade restrictions will actually benefit America as a nation?
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Instead, we are encouraged to presume that politicians merely need to issue a few commands and federal bureaucrats will instantly apply their wisdom to remedy our economic problems. But unless politicians intend to ban all imports or inflict the same tax on all imports, then government officials will need to make distinctions between products.

In the past, Customs Service employees wrestled heroically with great questions such as “Is a popcorn popper an electrothermic appliance or an electrical article?” and “Is a jeep a truck or a car?” The United States has thousands of different tariff classifications, with tariffs ranging from zero to more than 100 percent. Naturally, tariff-classification rulings are often disputed with a passion that would have made St. Thomas Aquinas proud.

Thousands of tariff categories in the past were restricted by import quotas. When Customs Service decisions change a product’s tariff classification from unrestricted to restricted, the ruling can effectively ban imports.

The absurdity of custom classifications

Customs Service officials worked overtime in late 1989 to protect America from foreign shoelaces. Customs prohibited the import of a shipment of 30,000 tennis shoes from Indonesia because the shoe boxes contained an extra pair of shoelaces. One Customs official decided that the extra laces were a clothing product that required a separate quota license for importing, and his decision set a precedent for the entire Customs Service. None of the tennis shoe importers were thinking of the extra laces as anything but part of the tennis shoe, and thus they were caught in their tracks without textile import quotas for shoelaces. (Some new tennis shoes have eyelets for more than one set of laces.)

Customs proceeded to establish intricate rules for shoelace imports. In a judicious ruling, the U.S. government announced that an extra pair of shoelaces would be permitted in a box of tennis shoes as long as the extra shoelaces were laced into the shoes and were color-coordinated with the shoes. But Customs warned importers, “We note that where multiple pairs of laces of like colors and/or designs are imported … a presumption is raised” that the shoelaces are not actually part of the shoe. Customs acted in the nick of time to prevent 250 million Americans from acquiring too many shoelaces of the same color.

Customs agents took to the ramparts to protect Americans from TV Ducks — cotton products made to sit on the arm of a couch and hold a TV remote control. Robert Capps, who owned a small company in Skyland, North Carolina, ordered a large shipment of the products from China — but the Customs Service prohibited their entry in 1995. Customs claimed that the little novelty items belonged in the same tariff category as bedspreads — and thus that Capps needed a textile import quota before he could import them. No U.S. company was making TV Ducks, but Customs officials were hellbent on protecting American consumers from the product. Capps hired a lawyer, who quickly convinced a federal judge to overturn the edict. However, the Justice Department appealed the decision and dragged the case out for a year and half, costing Capps millions of dollars in lost sales before a higher panel of federal judges again trounced the agency.

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Why the Free Market Is Hard to Defend

Posted by M. C. on August 29, 2024

The free market exists because of something no one likes to be reminded of: scarcity.

As Hayek showed, government control over the means to human flourishing leads inevitably to government control over the ends of human flourishing.

Why the Free Market Is Hard to Defend

Nathan W. Schlueter

Under steady pressure from post-liberal and populist voices, Republican party leadership seems to have taken a surprising turn against the free market and towards interventionist policies—protectionism, industrial policy, regulations, welfare, and labor unions—more traditionally associated with the Left than the Right.

The truth is that the free market is not easy to defend. That is not to say it is indefensible. To the contrary, there are many strong arguments in favor of it, including the scope it gives to human freedom and creativity; the innovation and wealth it generates; and the incompetence, injustice, and dangers of undue government interference and control.

But most people find it difficult to understand and appreciate these arguments when faced with the immediate advantages of government intervention. The problem is not logical, it is psychological. Instead of an explicit rejection of the free market, we have witnessed the steady growth of well-intentioned anti-market attitudes and policies, which cause real but hidden harm while nudging us along what F. A. Hayek famously called The Road to Serfdom.

We can see why the defense of the free market is so difficult and yet so important by juxtaposing it with other domains of human action. The common good of a healthy political association is not simple. It includes at least three spheres that exist in a dynamic and uneasy tension with one another: civil society, the free market, and government.

This seemingly clear division can be very misleading, since all of these spheres, and their corresponding activities and habits, overlap and intersect in ways that are difficult to distinguish. Each sphere has its own distinctive purpose, activity, and “logic” or mode of practical reasoning. And one consequence of this complex reality is that human beings must learn, and learn to apply, different standards of evaluation and behavior to different domains in their lives.

Put most simply, civil society is the sphere where persons pursue the “intrinsic” goods—goods we have reason to want for their own sake—that constitute happiness and flourishing. Civil society is the space of genuine leisure; not merely entertainment, but worship, marriage, family, friendship, and culture. It operates by a “logic” of generosity, commitment, caregiving, and charity.

The free market is the sphere of “instrumental goods”—goods such as money that we only have reason to pursue for the sake of other goods—where persons acquire the means for their flourishing by exchanging their time, labor, resources, and other instrumental goods. It operates by a “logic” of negotiation, calculation, and thrift.

Finally, government is the sphere that provides the overall framework within which the other two spheres can operate well. Government also helps prevent encroachments by the other spheres and provides goods that are difficult or impossible for the other spheres to provide. Government operates by a “logic” of common deliberation and collective action on behalf of the common good, backed by coercive power. 

Each of these spheres provides something distinctive that cannot be provided by the others. Left alone and in isolation from the others, each is prone to expand beyond its due limits, harming people and the common good. The challenge is to make all three work together and correct one another in the way that best promotes human flourishing. The constant ideological temptation is to reduce them to one. Totalitarian ideologies such as communism and fascism attempt to absorb civil society and the market into government. Libertarianism tends to reduce government and civil society to the logic of the market. More subtly, theocracy seeks to subordinate both government and the market to a unified vision of civil society determined by religious authority and doctrine. 

Of these three spheres, the free market is the most difficult to defend. And that difficulty is not simply the result of market excesses or externalities, like manipulative advertising, a surplus of cheap, ugly products, or pollution. The difficulty is intrinsic to even a healthy market. The reasons have to do with scarcity, utility, impersonality, self-interest, and complexity. These words typically cause a negative emotional reaction. Yet each word expresses a reality we rely upon every day, and which we must humbly acknowledge and accept in order to flourish.

First, the free market exists because of something no one likes to be reminded of: Scarcity. Human beings are very needy. Nature does not spontaneously provide food, clothing, and shelter, much less the time or instruments of leisure like books and musical instruments.

Second, the primary advantage of the free market is its usefulness in helping overcome scarcity. We all like and need useful things, but as Aristotle repeatedly observes in his Nicomachean Ethics, the useful is not beautiful. Beauty consists in a gratuitous overflow of being that attracts our wonder and admiration, whereas the useful is merely necessary.

True, the market unleashes astonishing creativity and energy. Ayn Rand is a mediocre novelist, but her romantic entrepreneurs remind us of the kinds of human greatness that can find a place in the free market, and of the gratitude we should have for their efforts. Still, in the end, for most people, the market is about “getting and spending,” in which all too often “we lay waste our powers.” 

Third, the logic of the free market is impersonal. If the first two elements did not elicit immediate negative reactions, this one is sure to do so.

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American Chip “Independence”: Protectionism by Another Name

Posted by M. C. on November 12, 2022

The latest restrictions seem to point not only to a larger decoupling of the US and China, but it could also create rifts in the US relationship with aligned countries with significant chipmaking industries. The new US restrictions are set to create scarcity, not abundance. As is the case with so many restrictive trade policies, consumers and firms alike will see fewer choices among products that use silicon chips and businesses will experience a fall in the production of those products that have so elevated the overall standard of living in modernity. 

https://mises.org/wire/american-chip-independence-protectionism-another-name

Weimin Chen

Virtually all aspects of modern, interconnected, and digitized life rely on the processing and memory capabilities of advanced semiconductor computer chips. Electronic devices including smartphones, game consoles, cars, televisions, household appliances, military hardware, and medical equipment rely on these minute, flat wafers of silicon made, astoundingly, from melted sand. The United States has focused its efforts upon this essential good to put pressure on China as tensions precipitate between the rival superpowers. Yet from the start, the US measures will harm American consumers and businesses.

A Pyrrhic Victory?

Over the years, both countries have layered policies on these advanced semiconductors as part of their larger economic competition. Although US measures target China, American and Western-aligned companies have ironically been feeling the pressure mount, as China makes up a major part of their market and manufacturing.

The share prices of American companies Intel, Micron, Nvidia, AMD, Applied Materials, and Lam Research all have fallen between 50 and 70 percent from their fifty-two-week highs. ASML of the Netherlands and Tokyo Electron of Japan have also experienced such drops in share prices. It may not yet be the bottom yet with the emergence of further trade restrictions from Washington as the chip war heats up.

On October 7, the US Department of Commerce expanded licensing requirements for exports of advanced semiconductors and the equipment used to make them. Unlike the previous ban on shipments to particular companies in China, the new policy covers all shipments related to the chip industry to China. It is estimated that cutting off China’s access to foreign chip related imports would set back the Chinese chip industry by years. Especially in the area of the most advanced chips, China has lagged behind US aligned countries as the highly technical methods remain out of reach without imports.

However, some have quickly noted the broader unintended consequences for the US due to the new regulations against China. Willy Shih, a professor at the Harvard Business School who specializes in technology and manufacturing, describes this kind of export control as “a bit of a blunt instrument,” noting that cutting off China from the capability to make the highest-end chips could push companies there to resort to producing more low-end chips which would in turn drive down prices for that segment of the market and make it harder for US and Western factories to compete. It would then come back to make Western buyers of those chips dependent upon Chinese suppliers. These less advanced chips are commonly used in simpler devices, but also as part of automobiles and even some military hardware.

This escalation of US restrictions in the chip market, while destabilizing in the short term for their rival, may act as fuel to accelerate China’s drive to achieve self-sufficiency in chip manufacturing in the long run. This has been the case with many technologies such as with the development of high-speed rail in China after Japan’s initial edge. Only a couple of months prior to the latest US measures, it was reported that China’s top chipmaker Semiconductor Manufacturing International Corp (SMIC) had reached a key technological breakthrough that made it possible to produce seven-nanometer chips on par with the best manufacturers in the world. Can the US actually win a chip war with this kind of restrictive policy or will it end up backfiring?

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Who Is Most Responsible for the Ongoing War in Ukraine?

Posted by M. C. on August 16, 2022

The Ukrainian war’s long roots stretch back to the pre-1914 protectionist era. Protectionism led to the First World War, the Second World War, the Cold War, the Korean War, the Vietnam War, countless wars in the Middle East, and the Ukrainian war. In effect, protectionism before 1914 caused a hundred years’ war. At least 150 million lives have been lost in this tragic hundred years’ war.

The only way to prevent war is to remove its root cause. If the twentieth century can teach us anything, it is that protectionism and socialism cause war. Eliminating government intervention in the economy is the key to preventing war. As Ludwig von Mises advises, “there is but one system that makes for durable peace: a free market economy.”

https://mises.org/wire/who-most-responsible-ongoing-war-ukraine

Edward W. Fuller

John Mearsheimer recently gave an important lecture on the Ukrainian war. He warns that “the United States is now effectively at war with Russia.” Mearsheimer argues, “The United States is principally responsible.” Alexander Stubb contends in a reply to Mearsheimer, “The only place to blame is the Kremlin, Putin, and Russia.”

Commentators who play the blame game over Ukraine do not understand the cause of war in the modern world. The Ukrainian war is the latest chapter in an ongoing hundred years’ war that began in 1914. Those who fail to realize this cannot understand the cause of the war nor how to end it and prevent future wars.

All of the governments entangled in the Ukrainian war share responsibility. Government intervention in the free market economy is the fundamental cause of all modern wars, including the Ukrainian war. All of the governments involved have systematically intervened with the free market economy for decades. Thus they are all to blame for this war.

Protectionism, Imperialism, and War

To fully understand the Ukrainian war, it is necessary to understand what caused the First World War.1 Many historians agree that a “fresh wave of territorial imperialism” after 1880 resulted in the First World War.2 But most historians cannot explain what caused the frenzy of imperialism from 1880 to 1914. The answer is protectionism.

In July 1879, Otto von Bismarck introduced a new tariff in Germany.3 As economists stress, a tariff benefits domestic producers at the expense of two groups: 1) domestic consumers and 2) foreign producers. A tariff impairs business in foreign nations, and foreigners naturally resent this.4

Bismarck’s tariff was a great mistake. However, as Ludwig von Mises emphasizes, “even if all other nations cling to protection, a nation best serves its own welfare by free trade.”5 Rather than embracing free trade, Germany’s neighbors foolishly raised their tariffs. As the table below illustrates, “all the large countries (except the United Kingdom) had very protective trade policies in 1913.”6

What does protectionism have to do with imperialism? A nation cannot profit from an empire in a world of free trade. By contrast, a protectionist nation can benefit from an empire.7 Consequently, protectionist governments are impelled to violent territorial expansion. The return of protectionism after 1880 started a new wave of territorial imperialism that culminated in the First World War.

Consequences of the First World War

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Biden Has Embraced Trump’s Protectionism | Mises Wire

Posted by M. C. on December 9, 2021

https://mises.org/wire/biden-has-embraced-trumps-protectionism

Joseph Solis-Mullen

The Biden administration’s decision this week to raise import duties on some Canadian lumber has US trade policy back in the headlines. Since taking office President Biden has moved to end a pair of trade spats with the European Union, while simultaneously leaving in place the Trump administration’s tariffs on Chinese exports. Despite the wide-ranging applause Biden received for his transatlantic deal making, this freeing up of trade has been an exception to the general trend. Indeed, since taking office Biden has tended to follow his predecessor’s protectionist bent, even while polls show that a majority of Americans still support free trade, though it has suffered a sharp decline of late. While there are several factors to be considered when measuring the benefits of free trade versus protectionism, on the whole, free trade comes out ahead.

First, protectionism always creates one clear loser: consumers. Whether as individuals or as firms, they pay more than a free market would dictate. Consider the results of the four principal tools of protectionism as experienced by consumers. Tariffs, by taxing the incoming import, raise the price paid by consumers for that good. Import quotas cap the amount of a given good that can be imported, protecting the ability of domestic firms to charge higher prices, again, paid by consumers. Export subsidies are tax dollars given to private firms so they can afford to sell their products more cheaply abroad than they do domestically. Lastly, individual or industry subsidies are devoted to encouraging the production of a good or service the government deems desirable—that is, of course, when they aren’t simply being doled out as favors to politically connected favorites.

Indeed, in virtually every instance the motivating impetus for the adoption of protectionist legislation is to be found in a core group of constituents who benefit from it. They are an example of what happens when the benefits of a policy are concentrated while the costs are diffused. A dollar here and a dollar there from every single citizen in the country over the course of years or even decades likely goes unnoticed by them, even though it adds up quickly, making the recipients eager to see the policy continued, whatever its public cost. Concentrating their focus and resources, small groups of wealthy beneficiaries effectively capture billions to split between themselves in this way.

It is a pernicious problem, and no industry is immune to the moral hazard of profitability by government welfare, through protection or subsidy rather than by working to improve products, methods, or management. Once entrenched, these policies are difficult to reverse. Consider the decades-long subsidy of mohair. Passed in 1954 in the name of national security, mohair being the key ingredient in US military fabrics, it was rendered irrelevant a decade later by the adoption of synthetic fibers. Still on the books in 1998, the subsidy was costing nearly $200 million dollars each year, over half of which went to the top 1 percent of producers. It continues in modified form to the present day.

The inefficiencies of protectionism are well known, and are part of why free trade results in greater economic growth than alternative protectionist regimes. If it can be gotten for less elsewhere, competing US producers should shift capital toward increasing productivity in order to compete or else steer their capital into other profitable ventures; labor will follow, acquiring any new or necessary skills required to continue their employment should they choose. This is to say that the cost of free market efficiency and its higher standard of living is the occasional temporary dislocation of both capital and labor. If these processes are not artificially hindered by government policy, however, they will not come as sudden shocks, but will rather take place gradually over time. Firms seeking survival and profit maximization will take steps as necessary to adapt to changing conditions. Subsidies, tariffs, and quotas offer domestic firms an easy alternative to the work of proper management. And though they lead to an overall lower economic outcome, for the firm or industry in question the difference is irrelevant.

The Buy American campaigns of Presidents Biden and Trump have grabbed headlines over the past five years, but behind the scenes the US has been moving steadily away from free trade since the early 2000s. Part of this was a reaction to the North American Free Trade Agreement. Despite its impacts having been a net positive in terms of trade, it was rosily oversold and seriously disappointed and angered many, particularly those employed in certain manufacturing industries where job losses were concentrated. All told, it is estimated that NAFTA cost the US about six hundred thousand manufacturing jobs, but a far bigger contributor to American manufacturing job losses was China’s accession to the World Trade Organization in 2001, which cost an estimated 3.7 million manufacturing jobs over roughly the same period.

The personal costs imposed on those dislocated by the competitive pressures of free trade are worthy of our personal sympathies, but the costs of protectionism far outweigh the narrow benefits it provides recipients. Free trade reduces inefficiency by forcing firms to constantly compete to the benefit of consumers; it reduces moral hazard, results in higher economic output, lower prices, a smaller state, lower taxes, and higher standards of living. No free trade deal will ever be perfect, and there will always be winners and losers, but good free trade deals result in winners and losers dictated by market forces rather than government favoritism. Author:

Joseph Solis-Mullen

A graduate of Spring Arbor University and the University of Illinois, Joseph Solis-Mullen is a political scientist and graduate student in the economics department at the University of Missouri. A writer and blogger, his work can be found at the Ludwig Von Mises Institute, Eurasian Review, Libertarian Institute, and Sage Advance. You can contact him through his website http://www.jsmwritings.com or find him on Twitter.

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Protectionism Is Immoral, Unjust, and Corrupt | Mises Wire

Posted by M. C. on November 4, 2021

All trade barriers rest upon the moral premise that it is fairer for the US government to effectively force an American citizen to buy from an American company than to allow him to voluntarily make a purchase from a foreign company. US trade policy assumes that the moral difference between an American company and a foreign company is greater than the difference between coercion and voluntary agreement. The choice of fair trade versus free trade is largely one of When is coercion fairer than voluntary agreement?

https://mises.org/wire/protectionism-immoral-unjust-and-corrupt

James Bovard

Protectionism is reviving in Washington on both sides of the political aisle. Democrats are cheering proposals to restrict trade to benefit labor unions and save the environment while some Republicans are reviving Smoot-Hawley style salvation schemes. Protectionist advocates routinely seize the moral high ground—at least as it is scored in Washington—by promising that restricting imports will magically produce fair trade.

Thirty years ago, in my book The Fair Trade Fraud (St. Martin’s Press), I sought to drive a wooden stake into both the intellectual and moral pretenses of American protectionism. Obviously, that wooden stake “didn’t take.” So here’s a recap of why government cannot make trade more fair by making it less free.

Protectionism produces political corruption, economic stagnation, and international conflict. Yet many people will insist that even though protectionism hinders a nation’s ability to feed, clothe, and house itself, the moral gains from protectionism are greater than the economic losses. But what is the moral core of protectionism? What is the ethical basis for fair trade as it is practiced?

American trade law is dedicated to the pursuit of the just price—but only for imports. Medieval theologian Duns Scotus declared that a price was just when “the owners of things…. preserve equality of value in the things exchanged, according to right reason judging of the nature of the thing exchanged in relation to its human use.” US trade law assumes that imported goods have an objective value in themselves which can be determined in a bureaucratic vacuum thousands of miles from the market where the product is exchanged. The soul of American trade law is that bureaucrats and politicians, not buyers and sellers, are the proper judges of fair value. All the absurdities, biases, and scholastic methods of the US dumping law follow from this principle.

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Protectionism Is Immoral, Unjust, and Corrupt | Mises Wire

Posted by M. C. on October 29, 2021

Either the government has a valid moral reason for restricting one citizen’s freedom to boost another citizen’s profits, or a trade barrier is unjust. Protectionism means robbing Peter to pay Paul—or, more accurately, robbing a thousand Peters to pay one Paul.

https://mises.org/wire/protectionism-immoral-unjust-and-corrupt

James Bovard

Protectionism is reviving in Washington on both sides of the political aisle. Democrats are cheering proposals to restrict trade to benefit labor unions and save the environment while some Republicans are reviving Smoot-Hawley style salvation schemes. Protectionist advocates routinely seize the moral high ground—at least as it is scored in Washington—by promising that restricting imports will magically produce fair trade.

Thirty years ago, in my book The Fair Trade Fraud (St. Martin’s Press), I sought to drive a wooden stake into both the intellectual and moral pretenses of American protectionism. Obviously, that wooden stake “didn’t take.” So here’s a recap of why government cannot make trade more fair by making it less free.

Protectionism produces political corruption, economic stagnation, and international conflict. Yet many people will insist that even though protectionism hinders a nation’s ability to feed, clothe, and house itself, the moral gains from protectionism are greater than the economic losses. But what is the moral core of protectionism? What is the ethical basis for fair trade as it is practiced?

American trade law is dedicated to the pursuit of the just price—but only for imports. Medieval theologian Duns Scotus declared that a price was just when “the owners of things…. preserve equality of value in the things exchanged, according to right reason judging of the nature of the thing exchanged in relation to its human use.” US trade law assumes that imported goods have an objective value in themselves which can be determined in a bureaucratic vacuum thousands of miles from the market where the product is exchanged. The soul of American trade law is that bureaucrats and politicians, not buyers and sellers, are the proper judges of fair value. All the absurdities, biases, and scholastic methods of the US dumping law follow from this principle.

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Economically Farcical and Ethically Foul – Cafe Hayek

Posted by M. C. on January 26, 2019

https://cafehayek.com/2019/01/economically-farcical-ethically-foul.html

by DON BOUDREAUX

Here’s a letter to the editor of the Wall Street Journal:

Editor:

The GOP effort to allow Pres. Trump, as you describe it, “to raise U.S. tariffs, as he pleases, in retaliation for another country’s tariffs and nontariff barriers” is deeply disturbing (“An ‘Old Testament Approach’ to Trade,” Jan. 24). This antediluvian move not only threatens destruction of the post-war system that has made trade freer, it also would make the world – including America – poorer.

But this move does have one advantage: it reveals protectionism’s immorality. Listening to Reps. Sean Duffy’s and Matt Gaetz’s excuses for this move makes clear that protectionism is a philosophy of predatory self-destruction. Protectionism holds that if Dick impoverishes his neighbor Jane by blocking her access to the grocery store owned by Sam, then Sam is ethically entitled to impoverish his neighbor Sally by blocking her access to the clothing store owned by Dick.

That is, protectionism is a doctrine in which Sam is assumed to be ethically more deserving than are Jane and Sally. It treats Jane and Sally – insofar as protectionism even takes notice of their existence – as pawns whose choices and actions are to be obstructed, and whose well-being is to be worsened, if a tale can be spun about how doing so will improve the well-being of Sam. Sam counts for everything; Jane and Sally for nothing.

Protectionism’s economic farcicality is exceeded only by its ethical foulness.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

 

 

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Trade Myths – LewRockwell

Posted by M. C. on July 10, 2018

Trade Myths

By 

I received several comments and questions regarding trade after the publication of my recent article, “Stupid Countries Restrict Trade.” Here is a summary of some questions that a few people had:

What should the government of the United States do if other countries impose tariffs on U.S. goods exported to their countries?

What should the government of the United States do if a country subsidizes its exports to the United States?

What should the government of the United States do if it had no tariffs on foreign imports but other countries imposed tariffs on U.S. exports?

Trade myths die hard. Here are three of them I want to refute based on the comments and questions I recently received. Read the rest of this entry »

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George F. Will: Who will protect Americans from the protectors? | New Hampshire

Posted by M. C. on February 12, 2017

http://www.unionleader.com/article/20170212/OPINION02/170219827/0/NEWS21

The American Enterprise Institute’s James Pethokoukis notes that parts come from South Korea, Japan, Italy, Taiwan, Germany and the United States. Components of Boeing airliners’ wings come from Japan, South Korea and Australia; horizontal stabilizers and center fuselages from Italy; cargo access doors from Sweden; passenger entry doors from France; landing gear doors from Canada; engines and landing gear from Britain.

Navarro’s “unwinding and repatriating” is, to say no more, part of an improbable project: making America greater by making Apple, Boeing and many other corporations much less efficient and less competitive.
This is where I part company with tariff and protectionism advocates like Pat Buchanan (who is otherwise pretty much right on). American companies source world wide. Tariffs raise prices and put a ball and chain on competitiveness. Not to mention foreign retaliation. Expect your cost of living to go up.

It is the consumer that dictates how the market does, not companies. If no one buys, your company is toast. Consumers don’t care about where it’s made or whether it is union made.

It is all about price. Don’t believe me? Go to Walmart.

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