Game of Thrones: Libertarian Edition

'Trade Wars' Don't Put Americans First

I'm a bit of a skeptic when it comes to tariffs. I don't believe in them. They completely undo true free trade. Tariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers. A specific tariff is levied as a fixed fee based on the type of item, for example, $1,000 on any car. Let's keep this as real as possible Mr. President, the American consumer wants to save as much as possible and the majority of us don't care if its made here or overseas, they just want to save money. That's the cold hard truth. Ever since Nixon made that trade deal with China, it completely demoralized the American factory worker shutting down countless businesses and putting a lot of proud hard working Americans out of not only a job, but a career. Outsourcing jobs has been the replaced as the best way to succeed in this global economy. Now with these new tariffs that president Trump is imposing, whats left of our countries manufacturing will surely fall to the waste lands. The Trump administration is trying to sell its plan to slap tariffs on imported steel and aluminum as necessary for national security, but the import taxes are an unnecessary step that will hurt American manufacturers and increase prices on a wide range of products, from cars to beer cans. Last week, Commerce Secretary Wilbur Ross formally submitted to the White House a proposal for 24 percent tariffs on all steel imports. Alternatively, the plan calls for a 53 percent tariff on steel imported from 12 nations, including China, with import quotas on steel produced in all other countries, capping possible imports from those locations at 2017 levels. The proposal also calls for a tariff of 7.7 percent on aluminum imports from all countries, or a 23.6 percent import on products from five countries (China, Hong Kong, Russia, Venezuela, and Vietnam) with a quota on all imports from other places. The tariffs are necessary because relying on imported steel and aluminum "threatens to impair the national security," Ross said. The theory is that, because American weapons of war depend on steel and aluminum supplies, domestic producers must be protected from international supplies that could be cut-off in the event of a conflict. Domestic manufacturers are eager for more protectionism from the White House. In February, executives from the largest American steel companies wrote a letter to Trump encouraging "action to stop the relentless inflow of foreign steel." While those American steel manufacturers would benefit from the tariffs, a far larger slice of the economy would be hurt. According to 2015 Census data, steel mills employ about 140,000 Americans and add about $36 billion to the economy, but steel-consuming industries employ more than 6.5 million Americans and add $1 trillion to the economy. The CEO of an Ohio-based manufacturing company says his business is already paying significantly higher prices for rolls of steel—and that he will have little choice but to pass those costs on to his customers. Trump has pitched his tariffs as being in the best interest of national security. "If you don't have steel, you don't have a country," he famously tweeted shortly before announcing the 25 percent import tax. He is right in that respect. we desperately need to be economically independent if we are to save what is left of our "made in the USA" slogan as the best in the world. Trade is really not that complicated. Kids do it every day, and they know what they're doing. But something happens when they grow up. Most people never grasp the most basic economics. Almost everyone in public life is a protectionist to some extent. Even those who lean toward free trade talk as though countries—rather than individuals—trade. Hence their favorable reception of government trade agreements. Once you buy into that sort of collectivism, you are bound for trouble. Still, Americans trade every day with others, so they implicitly "know" why trade is good and why restriction is bad. They like variety, choice, and bargains. Yes, they are nationalists, so they think differently about trade the moment goods and money cross a national boundary. They see virtue in buying "American," even if "American" means many foreign factors of production. Nevertheless, when they shop, most of the time they act like free traders. We work to live, not vice versa. We live in a world of scarcity, which means we constantly have to make choices and face trade-offs. Time, energy, labor, and resources used in one way cannot be used in another. No, President Trump, it's not true that if you tax imported steel, we "will have protection for the first time in a long while." The opposite is true. If you raise tariffs on steel and aluminum, you punish consumers. Yes, such tariffs also punish Chinese producers and protect some American businesses and workers, but the tariffs will hurt many more Americans. They'll hurt every business that makes things from steel or aluminum. They'll hurt most everyone who buys anything. Tariffs are taxes, and they don't just affect inanimate metal objects. They punish people. Even if China "dumps" products—sells below their manufacturing cost—that just means that China hurts its people and gives us discounts. We win. We get products. All the Chinese get is paper with pictures of American presidents printed on it. What can they do with those? Either buy our products, or invest in America. Either way, we win. Did we learn nothing from what happened when President George W. Bush raised steel tariffs? The trade barriers protected 1,000 jobs. But they destroyed 200,000 other jobs. Bush wisely withdrew the tariffs. Trade only happens when both sides think they are better off for making the trade. Win-win, or it doesn't happen. Trade is always good because it is voluntary. Anyway, that's my opinion on this. I can only hope that these new tariffs truly work in our favor. Only time will tell. Thanks for reading!