TARIFFS, TRADE AND TYRANTS
Democrats agree with Trump that tariffs on China are a good idea. It always concerns me when the political classes in D.C. are in full agreement; the last time that happened, they voted for the Iraq War.
Retaliatory tariffs will hurt the U.S. in the near term and China in the longer term. If ever Trump is going to take on the Chinese, who have cheated on trade for years, it is now. With low inflation, a good economy and the stock markets near highs, we are in the best position to endure a trade war.
When I was attending Georgetown University in a remedial program for Southerners, I worked for President Reagan’s U.S. trade representative, former Sen. Bill Brock, R-Tennessee. We were free traders. We knew the world was a safer and more prosperous place when nations traded goods with each other. We said, “When goods cross borders, troops don’t.” Missiles and war rhetoric did not bring down the Berlin Wall eight years later; it was Russian citizens’ desire for Levi jeans, Marlboro cigarettes and Jack Daniel’s whiskey that did.
We knew that the difference between a welfare cheat and a tariff was that if you put a gun to the head of both of them, at least the welfare recipient would work.
The acrimonious argument about who pays for tariffs need not be a debate. Trump says China will pay them but, like Mexico paying for the wall, he conflates bluster with reality. Tariffs are, in essence, a tax on goods imposed by a government to punish another country. Consumers, you and I, pay the tariff in the form of higher prices at the cash register. Whether we pay the full 25% increase or a percent of that depends on if the product can be purchased from a less-tariffed country like Vietnam or India.
China’s communist centralized, command-and-control economy is in a quandary here. Cut prices and maintain market share to continue to employ their masses who demand jobs, or don’t reduce their prices and risk the pitchforks of the proletariat which might start protesting the kleptocracy which every socialist/communist country devolves into.
Trump tried to have a nice relationship with China’s President Xi Jinping. Trump even invited him to Mar-a-Lago, and he met the Trump kids. When the Chinese president met 13-year-old Barron Trump, he was very nice and even asked which factory he worked in.
Trade wars were the cause of the War of 1812. Tariffs and French/British trade impediments sparked this war in which we got our tail whooped. The British actually attacked Washington, D.C., and burned down the White House. It is a forgotten war that we lost so badly we called it a “tie.”
President Lincoln raised tariffs on cotton and the like, which was one of the factors leading to the Civil War. In fact, Lincoln was very similar to fellow Republican Trump: Both presided over a bitterly divided nation, raised tariffs, and actors of the day wanted to kill them.
China has long made money on Americans and for American companies like Walmart by selling us cheap goods. They go from selling Americans size large T-shirts for $10 one year, then XL T-shirts the next year. We are now into XXL and beyond, and will have to pay 12 bucks. Most will not notice; inflation is under control, and countries like Vietnam have become competitors with China for production of cheap goods.
Capitalism has a remarkable way of getting the best product to market, at the best price, when government leaves it alone. At this writing, I cannot think of one thing government inserts itself into that is made better.
You can tell the Chinese are directing their anger at Trump. They just slapped a $250 tariff on each MAGA hat they produce — which is all of them.
Trump feels he was successful in renegotiating NAFTA with Canada and Mexico. He raised tariffs on Canadian dairy products, which made him more popular with Wisconsin farmers than an Aaron Rodgers football jersey. I am not sure what tariffs he imposed on Mexican products because I do not know what they export other than illegal aliens.
Our politicians are owned by drug companies, so they have been cracking down with tariffs on generic Viagra sent here by Russia and North Korea. Dems have been clear: They won’t stand for foreign interference with our erections.