Well, look who’s being preachy. Now, the left has a well deserved reputation for being sanctimonious when it comes to lecturing Americans about what we should eat, how we should behave, how we should vote, even what we should think. It’s not attractive, but it’s also not unique to the left, the right likes to get on its high horse and sermonize too, why conservatives are even willing to go to war against the American people for making the wrong decisions about what to buy. That’s how President Donald Trump rolls at the moment, he’s upset with the American people for having our own minds about how we spend our own money, and so he plans to punish us by raising prices on many of the things we buy by imposing tariffs. Contrary to popular belief, tariffs are not an act of war against foreign countries. That would be too easy. Well, there’s a war all right, but it’s against US consumers.
The objective of tariffs is to encourage Americans to buy products made in the United States by punishing them with higher prices until they fall in line and start spending their money the way the government wants them to.
When Trump vowed to make America great again, he apparently meant great as in setting the stage for another Great Depression.
This is not a purboly. Pick up a history book and see for yourself. The last time the US government fiddled with the kind of protectionism that Trump is now peddling, like shoes and Cologne and cryptocurrency, millions of Americans wound up standing in bread lines in 1930 Congress passed the Smoot Hawley Tariff Act, the bill which was signed into law by Republican President Herbert Hoover and raised by as much as 60% about 900 import tariffs. This bill aimed to protect US businesses from foreign competition, but it backfired and sent the US economy into a death spiral. Now tariffs are back in a big way. Actually, the truth is, they never left. They have bipartisan support.
Trump gave them a try in his first term, but President Joe Biden kept a lot of them on the books. Now Trump is headed back to the White House, and he has promised even more tariffs. When Americans talk about tariffs, we focus too much on the politics and not enough on the economics. Most economists see tariffs as a sure fire recipe for economic suicide.
It’s time to think more deeply about tariffs. Here are three things Americans should be thinking about.
One, tariffs are a tax on imports designed to protect whole industries from competition when those industries cannot compete globally. Notice that Apple and Amazon don’t need tariffs.
Tariffs are an in your face form of protectionism, which Democrats typically champion and Republicans usually oppose. They also violate one of the principles behind free trade,
number two,
tariffs have a perverse way of inflicting pain on our best friends, allies and trading partners. It’s not Iran or Russia who will get hurt by the Trump tariffs. It’s our neighbors, our friends. The President Elect has threatened to impose a 25% tax on all products entering the US from Mexico and Canada. Tariffs have the ability to turn friends into enemies, and
number three, tariffs beget more tariffs. Mexican president Claudia sheinbaum has threatened to impose tariffs on US goods coming into Mexico. Canadian Prime Minister Justin Trudeau, who said recently, the US tariffs on everything from Canada would make life for Americans, quote, a lot more expensive, while he made a similar threat. I’m tempted to say that by flirting with tariffs, Trump is playing with fire, but it’s more accurate to say he’s juggling sticks of dynamite.
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