Well, I’m awful late for this, but, I thought I’d add my 2 cents towards this discussion.
As most of us are aware, president Trump has announced he is going to impose tariffs on imported steel and aluminum. He’s also hinted at additional tariffs ……… much of the world went insane at the announcements. Sadly, many so-called conservatives (they’re actually globalist ‘free-traders’) have joined in the chorus as to what a great folly this would be. What astounding ignorance displayed!!!!!
Those who have paid close attention to my writings in the past know I’ve advocated such tariffs and still do. I will attempt to give a brief recap of all of the posts advocating or alluding to such advocacy and why ……..
First and foremost, and I want to be clear, tariffs or the presumed tradewars from such tariffs are not always good. It greatly depends on the position the nation is in. Indeed, there are very few nations in which a trade war could be beneficial. However, tariffs are always beneficial if the opposite nation does not reciprocate in kind.
But, let us discuss the specifics of the position of the US ……… for those who may not know, we already impose tariffs on many products. Also, tariffs on many of our exports are already in place. So, given these conditions, I seriously doubt an ensuing trade-war because of said tariffs. But, still, perhaps it will happen ……. and let it come, sir! LET IT COME!!!!! Here’s why ………
The US doesn’t need anything from any nation. I can’t think of one resource or raw material which fills a need that the US doesn’t have. I can’t think of one product, produced by another nation that the US needs. The same, however, cannot be stated by much of the rest of the world.
Oh, btw, while it shouldn’t have to be stated, I feel it might for some readers. The job of the US government is to work in the interests of the US people, and no one else.
So, what are the potential consequences of tariffs and counter tariffs and trade-wars for the US?
Yes, costs of products may increase, but, perhaps, only temporarily, and perhaps inconsequentially. As many faithful readers know, I like my beer. Well, that’s an understatement, but, I’ll leave it at that. I’m told the suggested tariff imposed on aluminum may cause the price of a case of beer to increase by 5 cents. …… no problem, I’ll just switch to bottles!!!!!! jk!!! Seriously, this then becomes a question where I’d rather have my money go. Aluminum, steel, beer …….. doesn’t matter. If I pay a dollar for a product and much of that dollar goes overseas, well, we as a nation have exported our wealth. However, if I have to pay $1.05 for the same product, but, the money stays in the US and provides jobs for Americans, then, the payoff is exponentially preferable than the cheaper beer, I-phone, automobile …… doesn’t matter, it’s a huge win for me, America, and the American people.
You see, that’s more jobs for American people to fulfill a demand. That’s more taxpayers, that’s less people reliant upon govt assistance, that’s higher wages because of the competition for workers! That’s more general wealth for Americans which then creates more demand for goods and services! Oh, did I mention “demand”? Well, then, we should also mention the other side of the equation …… “supply”. Recall, I said the cost increases may be temporary? Yes, that’s because there likely will be an increase in the global supply of a product.
Let’s say the steel tariffs causes the US steel industry to recover to past form…… suddenly the global supply of steel is dramatically increased. What happens to prices when there is suddenly much more supply? Well, what has happened to the price of oil?
The world is progressing. It is modernizing. Until this stops (I doubt it ever will), there will always be demand for energy and materials. I think it best for the US to be the provider of such rather than nations such as China. We should not acquiesce any industry to any nation until such a time that there is no significant demand for the product of said industry.
Again, I’d like to state, these notions are for the US only. Other nations are not in such a position. In economics, nations must play to their strengths, and mitigate their weaknesses, else, ruination is sure to come. They must ensure the economic well-being of their populations. If they have minerals, let them mine and compete, if they have crops, have them farm and let them compete, if they have fishing, let them fish and compete, if they have woods, then, ……. oil, gas, coal, ……… it is a matter of happenstance, or, as I like to believe, Providence, the US has it all. We should not squander our wealth and assets.
Thoughts are welcome.