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Free Minds & Free Markets

How Trump's Steel Tariffs Harm America

The American people will suffer more than the moguls in the steel industry will benefit.

In light of President Donald Trump's announcement of new tariffs for China, I thought I'd share one thing I've learned this year about those who believe in protectionism. Don't be fooled; even though they claim that America benefits from protectionist policies, many of them know that those policies hurt us all. Occasionally, they even admit it in public.

Here's a recent example. A few weeks ago, Commerce Secretary Wilbur Ross expressed his opinion that everyone should relax about the Trump administration's giving a handout to its friends in the steel industry, because the tariffs will only hurt our whole nation a little. The pain, he says, will be "negligible." That's easy for him to say from the comfort of his federal government office.

As my colleague and trade expert Christine McDaniel noted at the time, trade economists know full well that the size of the nationwide estimate used by the secretary to justify the president's import tax is pretty irrelevant. Yes, economy-wide effects of import taxes on a good in one particular industry are understandably very small when measured against our giant economy and all industries put together.

What really matters is that on net, the economy, the American people, and American firms will suffer more than the steelworkers and moguls in the steel industry will benefit. What Ross, of course, forgot to mention is that the specific impact of the steel tariffs on those workers and firms in steel-consuming industries is not only negative but large.

As if the carelessness of our commerce secretary weren't enough, I draw your attention to a new report by a steel lobbyist group called the Coalition for a Prosperous America. It argues that the Trump tariffs on steel and aluminum imports will create 19,000 jobs and reduce the United States' gross domestic product by only $1.4 billion.

First, let's consider these findings in the most favorable light. Let's assume that the tariffs will actually produce 19,000 jobs. Let's also assume that the creation of these jobs will cost only $1.4 billion in economic growth. As George Mason University economist Donald Boudreaux notes, "each job created will cost $73,684 (which is $1.4 billion divided by 19,000). The typical worker in a steel mill earns in annual wages about $55,556. If we assume that this worker gets another 20 percent of this pay in the form of fringe benefits, each steel-mill worker, on average, is annually paid about $66,667. It appears, therefore, that the price we Americans will pay per job created will be roughly $7,000 more than each of these jobs is worth." That's not a good thing.

I suspect that like Ross, the lobbyists believe that this isn't a high cost for us to pay. But as Boudreaux rightfully adds, "this same reasoning, were it valid, would also justify pickpocketing, as the negative impact of pickpocketing on U.S. GDP is likewise very tiny."

Second, as the Mercatus Center's trade policy co-director Dan Griswold also commented upon reading the report, "if the number of workers goes up, and total output goes down, is it not simple math that output per worker (or per hour worked) has gone down?" Yes, it is. That means that the workers' productivity has gone down and that their wages will, too.

In other words, the Coalition for a Prosperous America might say, yes, Americans are losers, but they should just relax about their big losses, as the steel industry will have the tiniest gain.

To make matters worse, it's hard to take that study seriously in the first place, considering that the head of the Coalition for a Prosperous America is the chairman emeritus of Nucor, which, as the biggest steel company in the United States, stands to benefit the most from the import tax. It's even harder to take the study seriously when one knows what happened when the United States imposed steel tariffs in 2002. It's questionable as to whether those tariffs created any net jobs in the steel industry, and they clearly caused the destruction of more jobs in steel-consuming companies than were employed in the entire steel industry at the time. We're talking about some 200,000 workers losing their jobs.

Americans must wake up. When government officials and special interests are so confident that we'll let them pick our pockets without any resistance—even when they tell us they're robbing us—you know things have got to change.

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  • Just Say'n||

    So you're saying that the tariffs will have little effect on your business? What impact will be leaving Facebook have on your business model?

  • plusafdotcom||

    So, you're saying that if I click that link, join your team and compete with you in the same marketplace, then post ads like that to recruit MORE competitors in the same market, that will HELP ME?

    Wow... Negative IQ on the hoof...

    http://www.plusaf.com/homepage.....-quota.jpg

  • some guy||

    I'm not sure anyone outside a union hall still thinks tariffs are a good idea. I hope the President realizes how bad these tariffs will be for the US and is only implementing them so he has extra leverage in economic negotiations. Who knows, though. Maybe he's just using them to rally a small number of his supporters at the expense of everyone else. It would be an odd time to do it, though, since he isn't up for re-election yet.

  • Leo Kovalensky II||

    "I'm not sure anyone outside a union hall still thinks tariffs are a good idea"

    Well, let's be fair. In the interest of crony corporatism, those in the boardrooms of US steel and aluminum manufacturers probably think they are good ideas as well.

  • Hank Phillips||

    The communist manifesto income tax was sold as a replacement for tariffs, then levied on individuals. If you believe a communist capitation tax that sends agents to kick in your door, take your car and empty your bank account is better than a revenue-only tariff levied on import corporations, raise your hand and shout "I do believe in fairies!" Shout 3 times, or Tinker Bell gets it!

  • spec24||

    We'd need more than 100% tax on every God damn product that came into our country to support the government as it is. The government was never meant to be so large. Small tarrifs weren't much of anissue when the government is s tiny fraction of the economy. Now it's a damn juggernaut. Both ideas can be equally bad, and you don't need to brlieve in fairies to understand that!

  • sarcasmic||

    Lots of people think tariffs are a good idea. You see, tariffs are not paid for by consumers. Tariffs are a tax on foreigners. It's the Chinese who pay the taxes, not Americans. Raising tariffs sticks it to foreigners while making domestic products more competitive. Tariffs are the price that foreigners pay in order to do business in America. Everyone knows this. Duh.

  • loveconstitution1789||

    We get that all costs are tacked onto price. Many other people don't get that basic concept.

    China is not playing by the rules in free trade, so what is the USA supposed to do? Nothing? You want the USA to play by free trade rules but not China?

    Markets decide price and which businesses go bankrupt. Not in China.

    Trump seems to be trying to break the trade lopsidedness between the USA and China with action (tariffs) unlike past presidents who just adjusted tariffs or tried to get various disasters like TPP negotiated. It might work or it might not work but at least he is standing up to the Commies.

  • sarcasmic||

    China is not playing by the rules in free trade, so what is the USA supposed to do? Nothing? You want the USA to play by free trade rules but not China?

    Yes. The only people who are harmed when our government retaliates is the people who buy stuff. Which is everyone.

    It might work or it might not work but at least he is standing up to the Commies.

    Standing up to the Commies by punishing Americans who buy stuff from China. Yeah. Sure.

    Do you cut off your nose to spite your face?

  • loveconstitution1789||

    Who is harmed when the USA allows China purposely to destroy the US economy?

    Sometimes you have to stand up to bullies who are trying to destroy what you have. It hurts when you get punched but you will be more free after you defeat the bully.

    Do you cut off your nose to Spiderface? No. No I don't but I would punch a bully in the nose who is preparing to murder everyone that I love and everything I hold dear.

    I am not sure how to explain economics outside of a bubble to people who consider China no threat to the American way of life.

  • sarcasmic||

    The Chinese are selling us stuff at a lower price than what it would cost for us to produce it ourselves! That means we don't have to put our resources into producing that stuff, and can instead do something else! The horror! Oh, the horror!

  • JesseAz||

    You seem to focus solely on the resource cost and not the industry or technical debt lost when we impirt whole sectors of goods. If at any point China cuts us off, for say war, and we have to reindustrialize our industries, that cost may well be much higher that moderate increases in the cost of goods.

  • sarcasmic||

    If at any point China cuts us off, for say war, and we have to reindustrialize our industries, that cost may well be much higher that moderate increases in the cost of goods.

    Then it would be best if we didn't engage in any foreign trade at all. We should become completely self sufficient. Better yet every state should become self sufficient. No trade with other states. Even better every city should be self sufficient. Think of all the jobs that would be created! Better than that every household should be self sufficient! Comparative advantage is a crock of shit!

  • Cynical Asshole||

    We should become completely self sufficient.

    Now you're getting it. We should embrace the North Korean philosophy of Juche. It seems to be working out really well for them. /sarc, obviously

  • gormadoc||

    How are the Chinese destroying our economy when they sell use stuff we don't make as easily and buy stuff we make more easily? Is the economy of NYC being destroyed by the fact that they make very little physical stuff and have to buy it from everywhere else? Is Arizona being destroyed by states that produce lots of agricultural goods?

    China is in no position to conceivably threaten the US. They won't ever be, at this rate. You can claim that China is just trying to destroy our manufacturing sector in preparation for war, but you'd be ludicrous to actually believe it. US manufacturing input is at a high not seen since just before the recession, and never before that. We have extensive external support, which China lacks. When China can produce certain things better than we can, we just shift our production to other things. It's not like the companies want factories to just lay idle.

    Even if you pretend that we are dependent on other countries for steel goods, it's not China that we look to but rather Canada and Mexico, among other nations. They sell us far more steel than China does.

    Sometimes you have to stand up to bullies who are trying to destroy what you have. It hurts when you get punched but you will be more free after you defeat the bully.


    What even is this? On the international stage, China is certainly not "bullying" the poor, defenseless US. They're just trying to badly build up certain industries they think are key to their economy.

  • vek||

    LOL

    If you think China will NEVER be a threat, you're a complete moron. They will be the biggest economy in the world within the next couple decades, and that's under a worst case scenario. It may yet come much faster.

    They're becoming far more important and imposing in their international relations. China is not behaving like India, which will also be one of the worlds largest economies in a few decades. India is being chill. China is very obviously ramping up for being the most domineering country in the world, like the USA has done for the last century or so.

    Anybody who can't see that is a fool who knows nothing of history, or current affairs. Now we may or may not co-exist somewhat peacefully with China when they are more powerful than us... But the fact is to pretend we shouldn't have some capacity to counter them should that relationship sour is foolhardy.

  • spec24||

    "If you think China will NEVER be a threat, you're a complete moron. They will be the biggest economy in the world within the next couple decades, and that's under a worst case scenario. It may yet come much faster."

    Yeah, I think it is you who have no idea what you're talking about, and you are the fool. The US, first, is China's largest trading partner. Without us they are dead in the water. And second, if you think the Chinese evinomy is doing well, and is poised to do even better, you don't know what the hell you're talking about. The Chinese economy has been doing terrible. They have overspent on infrastructure, and they ate producing generations of people who can't think their way out of a paper sack. Sure, they can get good grades on tests, but that's it. They're producing mindless drones. That is why innovation STILL comes out of the US. Don't be an idiot.

  • spec24||

    "Who is harmed when the USA allows China purposely to destroy the US economy?". You are just making shit up. China is hardly destroying our economy.

  • spec24||

    "I am not sure how to explain economics outside of a bubble to people who consider China no threat to the American way of life."

    You don't know a damn thing about economics besides what you learned on Fox news.

  • vek||

    LOL

    Yes, China is having some mild bumps in the road... And still has a GDP growing far faster than any western nation. They're closing the gap rapidly. I don't think China will have a per capita GDP to rival that of the USA or Europe in any foreseeable timeframe, but that doesn't matter. Their OVERALL GDP is going to surpass the USA before too long.

    Keep in mind the main reason the USA has been sooooo much more powerful than any other 1st world country for the last several decades is solely because we're the most populace 1st world country. If not for us having over 300 million people a country like Germany would be within pitting distance of us.

    China will be the same deal. When their per capita income is 15K or so per person, they will have surpassed us in overall GDP. That's barely being up to snuff with shitholes in latin America or Eastern Europe, AKA easily done. And their companies are in fact slowly but surely innovating too. We thought the same about the Japanese never catching up in the innovation game, and we all know how that turned out... China WILL be the biggest economy in the world, the only question is how much bigger. Will it be barely bigger, or twice as big, three times as big? We'll find out.

  • scJazz||

    Using words like commie and chinese doesn't help. Lets try something smarter... to enter the Chinese market you must, give up all you Corp secrets, submit to laws that even the most insane "Sanders" would not accept, censor any mention of Tienamen Square, hand out all your manufacturing to what can an at best be called "forced labor", allow "penetration agents" into your Corp. SCREW THAT ALL! Free trade is free when there is free trade. The author of this piece is an idiot for even suggesting everything in this piece. It is Free when it is Free. China, Europe, Canada, Mexico, ad nauseum... do not have free trade with the USA. So Author should go back and continue drawing pretty pictures with crayons and otherwise NEVER WRITE ANOTHER THING AGAIN!

    Trump is forcing the issue of Trade. It is not free or fair unless you live outside the USA. Sticking with the absolute Libertarian opinion doesn't make you smart. It makes you look like a "MARK".

  • gormadoc||

    That's how China fucks themselves over: by placing onerous restrictions (ie. costs) on business operating within their border. Their "breaking the rules" of free trade hurts them more than it hurts anyone else. I don't know how it's justifiable to pretend that the US placing new onerous restrictions on businesses operating within our borders is good when we accept that it isn't when China does it.

    And Chinese industry labor isn't "forced" labor. It's shitty by American standards but they offer it freely. Chinese slave labor is mostly relegated to small agricultural regions that have little impact on the greater economy, operating on a traditional basis. If you're going to whine about slave labor, whine about India, which has a far greater number of people in slavery than China does, and these slaves are more involved in the larger economy.

  • vek||

    You clearly miss out on the fact that those restrictions have benefited China in many ways.

    If they didn't demand 51% control of the interest in joint ventures there, then almost every factory in China would be 100% foreign owned. Instead their people own at least 51% of all the joint ventures, ventures worth trillions. Hundreds of billions of dollars in technology transfers have been given to Chinese companies that never would have been given for free if not demanded. On and on.

    They've also lost out on some opportunities by being restrictionist as well. But when one lays out the pros and cons it is hard to say that they're definitively in the negative. The fact is certain mild mercantilist policies do achieve ends that are somewhat desirable. Basically no country in history has ever industrialized with anything resembling free trade on their end, so it's hard to know if a country even can do it without SOME protections in place during the transition period at least.

    China is probably long past the point where they need that, but if they had opened up fully on day one they might have ended up getting shit on pretty bad what with no Chinese owning any of the means of production in their own country.

  • spec24||

    God you're stupid.

  • spec24||

    "China is not playing by the rules in free trade..". And what rules are those? I don't want anyone playing by some arbitrary set of rules that some idiot lays down. I want products that are cheap and make my life better. You know what you can do with your "rules."

  • sharmota4zeb||

    Tariffs are bad, but economic isolationism is becoming more popular. Obama's 2012 campaign videos on YouTube attacked Romney for outsourcing jobs. Trump stole Obama's talking points on trade.

  • Cynical Asshole||

    economic isolationism is becoming more popular.

    Right, and we've seen that movie before back in the 1930s. What's that old saying? "Those who don't learn from the mistakes of the past are bound to make it work the next time around," right? I think that's how it goes.

  • plusafdotcom||

    Sarcasmic, please use Ironic Sans font when you make comments like that, ok? :)

    Thanks!

  • Kivlor||

    Well, there's the tiny minority of people like me who think that tariffs are a better tax than the income tax.

    But it's not like Trump, the GOP, or anyone is arguing to do away with the income tax and replace it with tariffs.

  • JesseAz||

    Except he did argue to lower the income taxes...

  • Cynical Asshole||

    Maybe he's just using them to rally a small number of his supporters at the expense of everyone else. It would be an odd time to do it, though, since he isn't up for re-election yet.

    Not only that but there's enough time between now and re-election for the economic impacts on steel consuming industries to fully kick in.

    But it's all good. The nth dimensional De Sitter space chess master knows what he's doing.

  • nicmart||

    It is quite possible that Americans have no power to induce meaningful economic change.

  • Just Say'n||

    The president is ignorant and he's stuck in the 80's with regards to trade. I can't wait until he starts railing about how Japan's economy will soon overtake the US

  • Leo Kovalensky II||

    China is the new Japan

  • loveconstitution1789||

    China's Co-Prosperity Sphere and defensive perimeter around China just like what Imperial Japan tried.

  • DJF||

    All must bow down to the Chinese Communist Party owned Baowu Steel Group.

    Nothing says Reason Free Trade more then Communist Corporations.

    Xi Jinping thanks Reason for its support.

  • sarcasmic||

    Fuck yeah! Stick it to the commies! Make them pay extra to do business in the USA! Just like greedy businesses pay for hikes in the minimum wage by digging into their profits, foreigners pay tariffs by lowering prices! America wins! Go team!

  • Citizen X - #6||

    The Chinese government suppresses its citizens' economic freedom, so therefore the U.S. must do the same? Sounds like solid reasoning.

  • loveconstitution1789||

    Americans won't have much economic freedom if everything is produced in China and all Chinese services in the USA send profits back to China.

    Free trade is the best. Unfortunately, China is not playing by the same rules that you want the USA to play by. Markets decide prices and which businesses deserve to go out of business not governments and China is trying to put as many American businesses out of business. This even goes against their interests since Americans without money cannot buy Chinese shit.

    Maybe the Chinese have other plans. Like get the USA so in debt that we leave China alone to conquer East Asia.

  • Iheartskeet||

    I could take your post, replace "China" with "Japan" and it would fit right in to the "Japan is taking over the world" panic of the '80's.

    New era, same imaginary economic bogeyman, same self-destructive solutions.

  • vek||

    There's a big difference between a country far smaller, and lower in population than us rising up AKA Japan in the 70s/80s... And a country with 4 times the population that ACTUALLY has the real world possibility to become the most powerful nation on earth AKA China now. It is especially worrying when said power has been open in their desire for power, and antagonistic against the USA and other western powers.

    Anybody who can't see the difference is blind.

  • Iheartskeet||

    My point is this: People have a tendency to become enamored of "new ways of running an economy", whether it was the USSR in its early days, Fascist Germany, or Japan. People just seem to love the idea of a government directed economy (in lite or heavy forms) leavened with a mercantilist outlook. China is just the latest iteration, from NYT writers praising its dictatorial decision making, to people such as yourself who apparently see some grand scheme of world domination, from which we must copy parts (tariffs etc.)

    In the end, these non-market tactics end up backfiring to one degree or another. Yet, people like yourself never cease wanting to adopt/copy these self-destructive policies.

    In the end, our priority is ensuring America's economic freedom and health. These policies make us weaker. Anybody who can't see THAT is blind. And Racist !

  • vek||

    Here's the problem with your thinking:

    China already tried outright communism, and it failed. They've now gone mixed economy, which history has shown can in fact function well enough. I mean see Europe or Japan as examples. They're the richest large countries on earth other than us.

    The British Empire, and all other older European empires ALL became wealthy with mercantilist systems. The USA in fact became wealthy with mercantilist policies! I'm not saying your HAVE to be mercantilist during the industrialization period, but history clearly shows it is not enough to stop a country from being successful.

    As far as China not wanting to "dominate the world" how blind can you be? That's like saying Hitler didn't have ambitions after he got Austria and parts of Czechoslovakia without firing a shot, like he was just gonna call it good. China has very clearly been making moves for many years to expand their power. I don't think they want to literally take over the world... They just want to be the #1 or #2 country in global politics. They want to play like the USA does today or the USSR did in its hay day. This is obvious.

  • Iheartskeet||

    If you think Europe and Japan are on the right track, economically or otherwise, I'd say you need to do more reading. I suggest the following, though its goes beyond economics. In short, these cultures do not offer good examples.
    How Civilizations Die-Daniel Goldman

    Your claims of mercantilist success go against over 200 years of economic study, thought, and analysis, going well beyond "theory" (citics like to say free trade is great "in theory"). You say that "history clearly shows..." but its apparent you haven't read any such history, just watched some dimwits on TV. I suggest the following to at least get some basic economic literacy.
    Free to Choose-Milton and Rose Friedman

    You last paragraph illustrates your confused thought process perfectly. Do they want to take over the world or not ? In any case, being for Free Trade doesn't mean I am not for a strong defense, and have argued such elsewhere. I don't really know what to make of your whole China power grab theme. Its not like some steel tariffs are going to derail whatever you think they will do. So, I think you need to put up or shut up: what EXACTLY should we do ? A 100% complete embargo ? Bomb the fuck out them while we can ? I mean, if you are all worked up, then take your logic to its conclusion. My guess it leads to a place as reckless and stupid as saddling Americans with tariffs.

  • vek||

    Europe And Japan: Did I say they were run perfectly? NO. But they're still the richest countries on earth after the USA, which is ALSO highly mismanaged. Perfection isn't required to do okay. The only major problem they both have is demographic, just like we do. Their native populations are dying out, and the uneducated replacements from the 3rd world aren't panning out like they hoped in Europe. Otherwise they'd be trucking along in mediocrity for the foreseeable future. Japan is pretty slow going because they aren't importing 3rd worlders, but I think they will probably be better off for it in the long haul honestly.

    Mercantilism: Did I ever say it was THE BEST way to do things? No. But it is factually correct to say that Europe, the USA, and Japan ALL became wealthy industrialized nations while having strong tariff and other market protections, and roughly practicing mercantilism. We probably all would have grown faster without such policies, this is what free trade theory says, but the fact remains we all did it without free trade... So China can as well, even if it makes it take longer. Understand? Again, perfection is not required to do well.

  • vek||

    Who knows what China's ambitions will be when they're the largest economy on earth. Maybe they'll be cool with a little light meddling like we do now and throwing their weight around in international affairs. Maybe they want something more. I can't see the future.

    But I do know they AT LEAST want to have as much sway as the USA does now politically. That's a minimum. I'm not saying we need to DO anything in particular about it, but simply be aware it is coming. There are probably a lot of minor things we might want to consider though.

    Like the fact that being hugely in debt to our #1 geopolitical rival is perhaps not the greatest idea... How to stop doing that? Lots of small things, like balancing the budget, improving our economy through deregulation, etc. We don't HAVE to DO any particular thing, but taking the future power of China in all of our actions is not a horrible idea.

  • Iheartskeet||

    At a minimum, you have previously argued that mercantilism is a good thing for the USA. I agree the world has made progress despite varying levels of tariffs. But its an "in spite of" not a "because of".

    If you are now saying Free Trade (not "Fair Trade") is best, well, then the argument is over.

    We further have no disagreement on deregulation, eliminating our federal debt, and I certainly believe we need a decisively strong military...be it threats from China or anyone else.

  • gormadoc||

    You sound like a socialist.

    The oppressed don't have much economic freedom if big business controls every industry.

    Free trade is the best. Unfortunately, big business is not playing by the same rules that we've agreed upon. Markets decide prices and which businesses deserve to go out of business not governments but big business is trying to put small businesses out of business. This even goes against their interests since poor people without money cannot buy their crass commercial products.

    Clearly big business is just trying to keep people working hard enough to not question the hard realities of the Capitalist system while they continue to keep their profits to themselves.

    Or how about this:

    Black people don't have much freedom if white people control the government.

    Free association is the best. Unfortunately, white people are not playing by the same rules that we've agreed upon. Discussion and social action decide what values we promote, but white people are trying to destroy as many black values as possible. This even goes against their interests since black people without their values can't contribute to society as well.

    Maybe the whites have other plans. Like keep the black man in perpetual bondage so that they can continue controlling him.
  • gormadoc||

    This is fun:

    Americans won't have much economic freedom if everything is produced in China and all Chinese services in the USA send profits back to China.

    Free speech is the best. Unfortunately, conservatives are not playing by the same rules that liberals abide by. Communities and values decide what ideas are reprehensible, but conservatives try to quash as many liberal ideas as possible. This even goes against their interests since liberal values are the best values.

    It's time to agree that free speech is code for hate speech and that conservatives hide their horrific ideas behind that code..

    More for Mr. lovesocialism1848:

    The proletariat does not have much security if capitalists control the government.

    Freedom is the best. Unfortunately, capitalists are not playing by the same rules that we've agreed upon. Social action and revolution decide what how the community acts, but capitalists are trying to control as many voluntary associations as possible. This even goes against their interests since capitalists are also subject to the oppression inherent within the system.

    Maybe the capitalists have other plans. Like continue controlling oppressed peoples and perpetuate capitalism.
  • Palin's Buttplug||


    Donald J. Trump

    @realDonaldTrump
    I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

    7:57 AM - Mar 29, 2018

    The Dotard is not happy with Amazon either.

  • loveconstitution1789||

    He left out that Amazon loves to collect sales tax to hold and collect interest on the millions before having to give that sales tax money tot he states.

    Additionally that the WaPo is the propaganda tool of Bezos.

    But hey, that's free market. Oh wait, we don't really have free market in the USA because of lefties like YOU Butt.

  • Myshkin78||

    They use the postal system as their delivery boy?! They must be stopped.

  • loveconstitution1789||

    Its meant to say that Amazon is not paying the full cost of actual delivery. Which is true but the USPS is massively subsidized, so nobody pays the actual cost of delivery.

  • Jima||

    Izzat like a perpetual motion machine? "Nobody pays the actual cost of delivery"? I think you mean everybody pays the actual cost of delivery, right? The cost didn't just magically disappear.

  • plusafdotcom||

    I don't think lovecons understands that....

    If Amazon is taking advantage of improperly low charges by the USPS, it's incumbent on the USPS to fix their own pricing (or slip the Congress' leash on them!)

    Just like tariffs... if my idiot government is willing to let me have a larger market share for my products by making my overseas competitors less competitive, there ain't too many people what's gonna turn down a suck at that juicy teat!

    So what if I make more profit by making EVERY one of my domestic customers pay more for my profit...?
    Especially if my Congressmonkeys support that kind of economic fucking stupidity?

    If the Electorate is so ignorant or stupid (or both) to think that tariffs are in their best economic interests, the problem is NOT with the companies taking advantage of that stupidity.

  • Hank Phillips||

    Anthony Comstock got the feds to meddle with the postal monopoly to stop plant leaves and birth control pushers, and the economy quickly collapsed in the original Black Friday. UPS was founded when the Pure Food law became a prohibition tool in 1907. Herbert Hoover ramped this up again during national prohibition, and postal revenues fell something like 15%.

  • loveconstitution1789||

    The USA tends to want more free trade than most countries. At the same time, what is the USA supposed to do when many of the countries that the USA trades with actively try and prevent US companies from selling there? Tariffs, trade restrictions, high taxation, massive regulations, etc. cause huge trade imbalances between the USA and other nations even when the US comes out ahead because of high sales in those countries.

    Tariffs are not optimum but even the Founding Fathers were okay with tariffs. Of course, these tariffs were one of the main sources of revenue for a very limited government compared to the bloated government today that would shock the Founders.

    If using tariffs gets China to lower some its trade restrictions and its temporary, I am not 100% against tariffs. If the tariffs are permanent to even the trade numbers, I would against that and it does not help US businesses in the long run.

  • sarcasmic||

    what is the USA supposed to do when many of the countries that the USA trades with actively try and prevent US companies from selling there?

    Buy their stuff?

    Tariffs, trade restrictions, high taxation, massive regulations, etc. cause huge trade imbalances between the USA and other nations even when the US comes out ahead because of high sales in those countries.

    I have a huge trade imbalance with the grocery store! They have never bought anything from me! Ever! I give them money and all I get is stupid shit like food! It isn't fair! I know what will make it fair! I'll make their stuff more expensive! It will cost me even more money to buy their food! That'll show 'em!

  • loveconstitution1789||

    You will have to explain the "buy their stuff" sarcasm more. Its not as good as you think it is.

    I see you love that grocery store analogy.

    Let me know when the grocery store is building man-made islands as a defensive perimeter to prepare for war, has nukes in its cereal aisle, expands its grocery chains by sending in troops to conquer the Whole-Tibet Food Stores, pays its employees far under what American politicians require Americans to be paid, for the same job, and issues bonds to you to buy its groceries.

    Free market is the best but we are not in a vacuum. You want the USA to play by free market rules but not China. How do you get countries to play by the same rules? You negotiate. Tariffs are a negotiation tool.

  • sarcasmic||

    How do you get countries to play by the same rules? You negotiate. Tariffs are a negotiation tool.

    Tariffs are a tax on the people who buy stuff. They don't punish the Chinese. They punish Americans who buy stuff made in China.

    Protectionism is little more than governments putting trade embargoes on their own people. What you advocate for is our government committing an act of war on us.

  • sarcasmic||

    I see you love that grocery store analogy.

    Yes, I do. Because it perfectly illustrates the absurdity of the concept of a trade imbalance.

  • loveconstitution1789||

    sarcasmic|3.29.18 @ 10:12AM|#
    I see you love that grocery store analogy.
    Yes, I do. Because it perfectly illustrates the absurdity of the concept of a trade imbalance.

    Actually it doesn't illustrate anything but peacefully going to YOUR grocery store.

    Which is why its so easy to mock with a counter-analogy like I provided.

  • sarcasmic||

    Which is why its so easy to mock with a counter-analogy like I provided.

    I'm still trying to figure out what your "counter-analogy" has to do with economics.

  • JesseAz||

    There is more to society than purely economics. There are also security concerns you seem oblivious to.

  • gormadoc||

    You can claim that it doesn't address the specific situation of a hostile nation that you're making up, but it definitely does expose the absurdity of worrying about trade imbalances.

  • JesseAz||

    It doesn't explain it at all since we have a free market consisting of other grocery stores who aren't isolating various industrial markets.

  • sharmota4zeb||

    Have you heard about the ShopRite-StopNShop war of 1995?

  • loveconstitution1789||

    Is that like the grocery store analogy war of 2018?

  • Hank Phillips||

    Conservative mystics pretend that the protective tariff did NOT cause the Civil War. They then turn around and believe just as fervently that such armed extortion is "good for the economy" in the same way making beer a felony was salutary. NOW a bad but impotent tariff of Abominations is blamed for the entire Crash and Depression following use of tax laws to enforce prohibition. Conservatives worship a mythical dead body invented 150 years after the fact and clothed in imaginary sermons praising altruism while wielding whips against those who use money. Surely one does not expect reasoned consistency from these ideologies, but rather, apologias holding their pseudoscientific policies harmless from all blame and liability for ensuing disasters. Have not the noble experiments of 1987 and 2007 given the lie to this superstitious evasion?

  • gormadoc||

    Tariffs are a negotiation tool.


    Clearly it's working. We certainly got free trade the last dozen times we imposed steel tariffs. Like in 2003, the year known as "that time we had free trade because Bush imposed steel tariffs and every nation kowtowed to the only super-power left in the world." Certainly the solar panel industry is free now, right? Tires, too.

  • ChrisC517||

    The Founding Fathers also lived in a US that was mainly an export economy and the labor for creating those exports was free.

  • Hank Phillips||

    Like Veronique, I once believed the Crash was a reaction to the coming Tariff Act of 1930. But comparison with the previous prohibition-era tariff of 1922 revealed huge differences in search, seizure and asset forfeiture powers for Coast Guard and Customs, and increases in tariffs and regulations on opium, coca products and the sugar bootleggers converted into moonshine. Europeans in the wreckage of another of their opium wars liquidated stocks when the US pressured Austria and Germany into passing laws against some drugs, including hemp. European stock markets peaked at about the time the Fifth Amendment was gutted so that bootlegger money could be seized under the income tax. Puritanical prohibition and looter laws caused money to flee banks and brokerages and the economy collapsed. The Kleptocracy then attributed the crash to exaggerated reaction to the tariff, thereby distracting historians from the prohibitionist measures that wrecked the economy and prompted formation of the Liberal Party for repeal. When writing on economics, it is good practice to separate these variables.

  • TJJ2000||

    As some commenters pointed out - Tariffs are just applying the American corporate tax to foreign corporations that usually don't pay Americans corporate tax.

    So "no tariff" means a tax exempt foreign corporation which has the %-American Corporate Tax rate advantage over any American corporation in the free market competition field. That sounds like about as correct and right assumption as any - but please fix any misconceptions with that. The only way to make the a level-field is either remove entirely the American Corporate Tax or charge a Tariff on foreign ones.

    Secondly the US Government has been subsidizing imports through the UPU (Universal Postal Union) U.N. Trade agreement. Essentially the UPU tells the USPS how much they "can" charge for foreign delivery and any deficit is collected by the American people either through USPS subsides/taxes or higher domestic shipping rates created to make up the difference. THIS AGREEMENT is what really should be terminated.

  • Echospinner||

    If the tariff on any commodity or product goes up the price paid goes up by as much.

    The consumer pays more for the same thing. Nobody wins a trade war. Idiots like Trump think trade is a zero sum game.

    You could get rid of the post office tomorrow and I would not miss it.

    UPS and Fed Ex do a better job. The post office delivers a box of trash to my house every day.

  • TJJ2000||

    If you buy imports - you will miss USPS because "free shipping" will no longer exist. The consumer pays more because their imports aren't subsidized by the nations taxes - so no tariff = more taxes.

  • vek||

    I don't know about this particular analysis of 19K jobs and 1.4 billion in costs, but the one done on the previous Bush tariffs was RIDDLED with obvious holes in its analysis.

    The Bush one didn't account for the fact that the workers would SPEND their money in the US economy, hence creating more local jobs and general consumption, that would have otherwise been sent directly overseas. Another was they claimed X number of jobs were destroyed by it in steel using industries, when in fact if you look at the trends they were already sharply down. The USA was losing manufacturing (steel consuming industries!) like gangbusters at the time, and basically the trend just continued exactly as it had been, but they attributed all the loses to the steel tariff, which was very disingenuous.

    There were other issues as well that I don't recall off the top of my head. But it was basically total bullshit. I wouldn't be surprised if this analysis is equally flawed.

  • peter007||

    This article assumes that we currently have free trade now. Could it be the case that other countries are currently imposing high tariffs on American goods and we just don't care? My impression is that Trump is merely attempting to renegotiate current trade policies and when you negotiate, you need weapons or sticks or something to offer. Let Trump get us a better deal,

  • Devastator||

    They absolutely have tariffs on our goods and the comments here show a bunch of people willing to take it up in the ass for some cheap chinese gizmos while our manufacturers face tariffs all over, especially in China. China also can do business however they like here, yet American businesses are severely limited in Chinese economies because the government highly favors Chinese businesses over foreign businesses. Fair is fair.

  • Devastator||

    So can we just stop trading with China because they don't really have a free market? Their entire market is controlled by the state. Sure the free market dictates the most they can get for their products but it doesn't reflect how low they will go to kill industries in other countries so that they won't have any competition, and then raise their prices as the only show in town. I don't mind tariffs on the Chinese because they aren't playing the market they are subsidizing industries to kill off competition.

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