Discussion in 'Politics & Government' started by Ken Anderson, Dec 10, 2015.

  1. Ken Anderson

    Ken Anderson Senior Staff
    Staff Member Senior Staff Greeter Task Force Registered

    Jan 21, 2015
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    I resent but am not surprised by the way that the media is reporting on the tariffs, as if a rise in prices would be an unforeseen consequence that Trump didn't think about, or that posturing by other world leaders is a sign that Trump was on the wrong track. It's not that I don't think Trump could make any mistakes, but I don't think he is making one here.

    He has said, from the start, that we need to make better deals, and I think that's what it is about. He has also warned that tariffs could cause high prices in the short-term. Our last several presidents, including the Republicans, seemed to be more interested in maintaining good relationships with foreign countries and often did so at a cost to the American people. I think that's what he's trying to fix.

    There are a couple of ways that it could go. After sufficient posturing for the benefit of their own media, other world leaders might decide that they need trade with the United States and arrive at agreements that are not completely one-sided, but more to the benefit of the United States than previous deals had been. If our media and politicians in his own party would stand by Trump on this, then I think this would be the likely outcome. That's not likely to happen, but agreements could still be made.

    The other outcome would be that the tariffs will result in higher prices on things that we import from other countries. The flip side to that would be that this would be an incentive for US companies to restart their operations, as we have already seen in several industries, and that foreign companies would begin operations here, to avoid the tariffs. There is a tendency to consider every Toyota sold in the United States to be a foreign import but, a few years ago, at least, Toyota manufactured more cars in the United States than Ford. These cars would not be subject to a tariff.

    This works both ways, of course. Recently, Harley-Davidson shut down one of its manufacturing plants in the United States. This was trumpeted as a failure of Trump's economic policies but, in reality, they moved one of their manufacturing plants to Asia because Asia it now represents more than 30% of their sales, and is a growing market, while it is a shrinking market in the United States, as our younger generations aren't into owning a Harley as much as our generation was.

    With tariffs in place, there will be an incentive for American companies to produce items that we now import from other countries, but there will also be an incentive for foreign companies to open manufacturing facilities here in order to avoid the tariffs. Either one of these is good for the United States because they will account for tax revenue and jobs.

    One or the other of these will come about sooner or later, the danger being that - like in a labor union strike - how much will we lose before we gain?

    It's a chance worth taking, I think. We have to do something. When the United States began to transition away from a manufacturing economy, we were promised that these manufacturing jobs would be replaced by better-paying high-tech jobs. That didn't happen. Most of the high-tech jobs are in foreign countries, such as India, China, and Japan. While there are high-tech jobs here, our work visa program has been changed to allow companies to import high-tech workers, paying them far less than US workers would be paid. A service center economy is only profitable for the people who own the service centers, paying little more than minimum wage to employees, and much of it part-time or seasonal, at that.
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