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Thread: GOP Needs to Leave Trump Behind on Trade

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    Default GOP Needs to Leave Trump Behind on Trade

    This should get some bites. It's an op-ed in the WSJ today. I readily acknowledge that there are downsides to free trade in that certain people do get left behind. But on the whole free trade promotes economic growth and a higher standard of living overall. It's a good thing and tariffs and trade wars aren't.

    This is a generalization but prior to Trump many on the right were supporters of free trade and while far more on the left were skeptical of it. Yet once Trump slapped all these tariffs on China it's like a 180 occurred and people on the right cheered and those on the left found religion on free trade. Now Biden has left most of the tariffs in place and those on the left complaining about them before have gone radio silent.

    And I like the author's statement that tariffs and the subsequent subsidies are the opposite of draining the swamp.





    GOP Needs to Leave Trump Behind on Trade

    His tariffs harmed American consumers.The party of freedom should stand for free exchange.


    ‘Our trade policy rests firmly on the foundation of free and open markets,” said President Ronald Reagan in 1986. Thirty years later President Donald Trump tweeted, “The word TARIFF is a beautiful word indeed.” His administration imposed—to cheers from parts of the GOP—tariffs of as much as 50% on steel, aluminum, and an array of Chinese goods. After being the party of free trade for almost four decades, some Republicans need a refresher course on the dangers of protectionism.

    Republicans undoubtedly consider the Tax Cuts and Jobs Act to be the crowning achievement of the Trump era. Yet many who heralded its pro-growth tax relief for working families now support tax increases on these same families in the form of tariffs. Numerous studies have shown that almost all the costs of tariffs initiated under the Trump administration were paid by American consumers and businesses. To take one example, the median price of a washing machine increased by $86 within months after President Trump imposed tariffs on them. According to the American Action Forum, Mr. Trump’s tariffs combined have increased consumer costs by approximately $51 billion a year.

    Some tax cut.

    Today the concern of most blue-collar workers isn’t the loss of their jobs to foreign competition, it’s the loss of buying power from a shrinking paycheck and historic inflation. I doubt many “elites” shop at Walmart, but working people do. Though the Bentonville, Ark.-based retailer doesn’t advertise the fact, Walmart remains the nation’s largest importer. The Zebco fishing rods Walmart sells are produced in China; the cowboy-cut Wrangler jeans likely come from Bangladesh. Walmart’s shelves are stocked with tons of affordable foreign-produced goods that help working families make ends meet. Tariffs make those products more expensive.

    Washington has legitimate concerns over the safety and reliability of supply chains running through China. Even Adam Smith mentioned national-security exceptions to the free-trade rule in “The Wealth of Nations.” But many companies are in the process of relocating their supply chains. Additional pro-growth tax and regulatory policies would likely spur even more to do so. A host of export controls, foreign direct investment approvals and defense procurement requirements exist to meet the threat China poses. But the national-defense argument remains one of the most abused in Congress and shouldn’t become a pretext for abandoning free trade in favor of industrial policy, corporate welfare and protectionism, all of which harm economic growth and innovation.

    In most respects the Trump tariffs on Chinese goods failed. The trade deficit, which remains a misleading statistic, actually increased during the Trump administration. Any decrease in the U.S. trade deficit with China was offset by increases in deficits with other countries. Further, two can play the tariff game. Ask the Midwestern farmers who suffered from China’s retaliatory tariffs and had to be bailed out with $12 billion in subsidies from the U.S. Treasury. It could not be clearer that tariffs did nothing to reduce China’s military saber-rattling, human-rights abuses or carbon footprint.

    For some Republicans, the loss of manufacturing jobs to foreign facilities has made protectionism seem attractive. Manufacturing employment as a percentage of the workforce has decreased dramatically since 1980. While some communities have struggled with this transition, these jobs have largely been replaced with service ones. That doesn’t mean low-pay employment like burger flipping, but rather jobs in fields such as healthcare, tech, communications and finance. The U.S. is the world’s No. 1 exporter of services and runs a surplus in services trade.

    Foreign competition isn’t killing U.S. manufacturing jobs. Productivity is the culprit. According to the American Iron and Steel Institute, it took 10.1 hours to produce a ton of steel in 1980; today it takes only 1.5 hours. While there are fewer manufacturing jobs than there were 40 years ago, the ones that remain pay better because of productivity gains. According to the Center for Strategic and International Studies, the median income of blue-collar workers in manufacturing increased 50% in inflation-adjusted terms between 1960 and 2019.

    The reality is that tariffs harm most manufacturing jobs. Roughly 60% of all goods imported are intermediary goods or materials used for domestic manufacturing, according to the U.S. Chamber of Commerce. Many pipeline-manufacturing companies import specialty casings for oil and gas projects. How ironic for any Republican to call for an “all of the above” energy policy yet support making hydrocarbons more difficult and expensive to produce through protectionism.

    Republicans love to talk about “draining the swamp” in Washington. But the tariffs imposed by the Trump administration empowered hundreds of bureaucrats at the Commerce Department and the Office of the U.S. Trade Representative to grant waivers under what can at best be described as an opaque process with discretionary standards. As one company officer of a small pipeline manufacturer told National Public Radio in 2019, applying for a waiver “is a nightmare, like dealing with a lawyer and the IRS at the same time.” A schedule of tariffs doesn’t drain the swamp. It fills it with well-connected lawyers and lobbyists who know how to work the system.

    The most important argument for free trade has nothing to do with economics. It has everything to do with securing “the blessings of liberty to ourselves and our posterity.” In other words, it’s about freedom. Fundamentally, trade should not be viewed as a discretionary foreign policy but as an individual right. If the GOP stands for freedom of speech, free enterprise and the freedom to bear arms, it should again unequivocally stand for free trade.

    Mr. Hensarling is a former chairman of the House Financial Services Committee (2013-19), an economics fellow at the Cato Institute and an advisor to Americans for Prosperity.


    https://www.wsj.com/articles/gop-nee...nion_lead_pos5

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    Good article, mostly. Even those of us without degrees in the fields of economics or finance understand that tariffs don't hurt the countries they're aimed at. They are paid for by those of us who buy the goods imported from those countries. They are one of the causes of inflation. Why this is so hard for the MAGATs to understand is beyond my ken.
    "Conservatism is the blind and fear-filled worship of dead radicals." -- Mark Twain

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    Quote Originally Posted by ThatOwlWoman View Post
    Good article, mostly. Even those of us without degrees in the fields of economics or finance understand that tariffs don't hurt the countries they're aimed at. They are paid for by those of us who buy the goods imported from those countries. They are one of the causes of inflation. Why this is so hard for the MAGATs to understand is beyond my ken.
    Unions, and by extension some/many of the their Democratic supporters, have long been in support of tariffs because it protects their workers. It may be a net negative as a whole to the country but unions exist to look out for their workers first.

    Reagan was a huge proponent of free trade and even he puts tariffs on Japan at one point. So I'm sure someone can argue their might be a specific reason for their use but outside maybe a few exceptions overall they hurt most American businesses and consumers.


    The below post is from a 2008 thread about U.S. - China trade costing American jobs. The response mentions me, and it is 100% true that I'm a free trader. But look at the mindset of the response. That's why people support tariffs, because free trade is (supposedly) for the rich and tariffs and stricter trade are for the working people.


    ""You think this was an accident, or somehow all unintentional?

    This was exactly what the wall street republicans, and corporate-sponsored Dems had in mind when the passed NAFTA, WTO, and China MFN.

    A downward pressure on labor costs and wages in the United States.

    People like Cawacko, Damocles, and Stuperfreak actually bought into the nonsense that William F Buckley, Ronald Reagan, George Bush, and Alan Greenspan were actually valiantly trying to improve the status, power, and wage potential of america's working middle class. Is it possible to be any more foolish that to believe scions of the conservative movement and america's rich investor were invested in improving the power and status of Joe and Jane working class american?""

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    Free trade IS a good thing so long as its a two way street. China was anything BUT free trade plus they were stealing intellectual property left and right. Qdd on the currency manipulation and it gets far more lopsided.
    Trade wars are no fun but if they do have the potential to solve the real problem.
    "Those who vote decide nothing. Those who count the vote decide everything." Joseph Stalin
    The USA has lost WWIV to China with no other weapons but China Virus and some cash to buy democrats.

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    Quote Originally Posted by Celticguy View Post
    Free trade IS a good thing so long as its a two way street. China was anything BUT free trade plus they were stealing intellectual property left and right. Qdd on the currency manipulation and it gets far more lopsided.
    Trade wars are no fun but if they do have the potential to solve the real problem.
    This.

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    Trade is complex, not easily explained, which is why it is demagogued by both sides for political ends. Concepts as comparative advantages and even opportunity cost are beyond cable infotainment

    Ironically, well in my view, TPP, which was opposed by the Trump’s right and Unions, was the answer to address China, Trump’s “America First” focus on bilateral agreements only allowed China to extend its influence world wide

    And I’d don’t think you noticed, and not only on trade, but today’s GOP is a far cry for that of Reagan, it belongs to Trump now

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    Quote Originally Posted by Celticguy View Post
    Free trade IS a good thing so long as its a two way street. China was anything BUT free trade plus they were stealing intellectual property left and right. Qdd on the currency manipulation and it gets far more lopsided.
    Trade wars are no fun but if they do have the potential to solve the real problem.
    Interesting note here, the “stealing intellectual property” isn’t quite an accurate description, those companies wanting to compete in China voluntarily surrender their intellectual property as a requirement to operate in China. Not saying it is proper, but they know what they are giving up, cost of doing business

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    Quote Originally Posted by ThatOwlWoman View Post
    Good article, mostly. Even those of us without degrees in the fields of economics or finance understand that tariffs don't hurt the countries they're aimed at. They are paid for by those of us who buy the goods imported from those countries. They are one of the causes of inflation. Why this is so hard for the MAGATs to understand is beyond my ken.
    How a pencil works is beyond your ken. The major source of inflation was your donkey brained president passing out "stimulus" money.
    "Political correctness is fascism pretending to be manners" - George Carlin

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    Quote Originally Posted by archives View Post
    Trade is complex, not easily explained, which is why it is demagogued by both sides for political ends. Concepts as comparative advantages and even opportunity cost are beyond cable infotainment

    Ironically, well in my view, TPP, which was opposed by the Trump’s right and Unions, was the answer to address China, Trump’s “America First” focus on bilateral agreements only allowed China to extend its influence world wide

    And I’d don’t think you noticed, and not only on trade, but today’s GOP is a far cry for that of Reagan, it belongs to Trump now
    Both political parties have changed since then. Political parties aren’t static, just like voters. There are numerous posters on this board who have been members of both parties at some point in their life, and it’s not unique to those here.

    Why do you think Biden hadn’t removed the tariffs? If they’re causing inflation seems like removing them would be a priority. I think it’s because he doesn’t actually have a problem with them.

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