Here A Tariff, There A Tariff

The word of the week….both this week and last is….TARIFF.

And as I always do I will look into the history of this country to explain the term of the week…….

The year was 1930 and the Congress enacted the Smoot-Hawley Act.

Okay what the Hell was the Smoot-Hawley Act?

The Smoot-Hawley Act is the Tariff Act of 1930. It increased 900 import tariffs by an average of 40 to 48 percent. Most economists blame it for worsening the Great Depression. That means it also contributed to the start of World War II.

In June 1930, Smoot-Hawley raised already-high U.S. tariffs on foreign agricultural imports. The purpose was to support U.S. farmers who had been ravaged by the Dust Bowl.

Rather than helping, it raised food prices for Americans who were already suffering from the Depression. It also compelled other countries to retaliate with their own tariffs. That forced global trade down by 65 percent.

Smoot-Hawley showed how dangerous trade protectionism is for the global economy. Since then, world leaders advocate free trade agreements that promote increased trade for all participants.

Our president has decided that he likes the idea of imposing tariffs on steel ans aluminum….and no matter which party one aspires to there is few that see any good coming from tariffs (my favorite part of this is to listen to a lying bitch thumping the cheap drum to the positive works that these things will do).

“Trade wars are good,” tweeted U.S. President Donald Trump, “and easy to win.”

And just like that, we’re back in the thick of it: Trump, looking to Make America Great Again, has threatened to use section 232 of the Trade Expansion Act of 1962 to impose tariffs of 25 per cent on steel imports and 10 per cent on aluminum, suggesting it’s a matter of U.S. national security. That would have a heavy impact on Canada, as it is the number-one supplier of both steel and aluminum to the United States. Of course, those proposed levies may just be more bluster for the ongoing NAFTA negotiations; indeed, Trump has said that a “new and fair” NAFTA deal would prompt the U.S. to consider an exemption.

But several things indicate things could be serious, including the Dow’s initial slump in reaction and many Republicans’ frenzied opposition to the decision. More worrying, even, is the fact that it’s entirely consistent with the rhetoric Trump campaigned on—namely, getting blue-collar workers in distressed industries back on the job with protectionist measures.

http://www.macleans.ca/opinion/what-we-can-learn-from-a-disastrous-1930-u-s-tariff-on-canadian-goods/

Some think that it will cost jobs……With economists warning of a potential 146,000 American jobs lost due to the proposed tariffs, Business Insider reveals the US states that could be hit hardest, including Louisiana, Connecticut, and Missouri.

There are some that think that this is just a tactic the president is using to keep the Rust Belt in his sphere of influence and that he will roll everything he has said back……an election ploy for the mid-terms.

We can hope that is his play but some of us do not think he is that clever.

I will do something that my Right wing brethren seldom do…..To be fair…..there is some positive news about the tariff thing…..

US Steel Corp says it will soon restart a blast furnace in Illinois that has been cold for over two years thanks to the 25% tariff on imported steel announced by President Trump last week, Politico reports. US Steel President David Burritt blames “unending waves of unfairly traded steel products” arriving in the US for the poor fortunes of steel workers in Granite City. He believes the planned tariff will turn that around. Restarting the blast furnace at Granite City Works will take up to four months. And while some believe Trump’s tariffs on steel and aluminum will be political winners, many experts are predicting harm to the US economy.

Finally…… Noah Smith at Bloomberg writes the tariffs could be a “self-inflicted wound” for Trump. He says tariffs typically don’t end up improving American industries. Rather they prevent industries from figuring out how to keep pace with global competitors, may lead to their products being seen as shoddy, and might hurt US manufacturers.

Has the GOP become an anti free trade party?

What say you?

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10 thoughts on “Here A Tariff, There A Tariff

  1. “We can hope that is his play but some of us do not think he is that clever.”

    Well, he manages to outsmart the media and the population on an almost daily basis. We continue to fall for his diversionary 3 ring circus.

  2. I’d be VERY hesitant applying a Depression Era, agricultural commodity, trade war to anything today. (Even if the story stems from a protected Canadian media oligopoly.)

    As longtime a hater of trade & economic policies that work only in favour of global corporations and global capitalists. Generally speaking, tariffs are a good thing. Yes, global trade may be good for business. But it’s bad for people. Free Trade is a philosophy in which people (and governments) have to limbo for scraps bestowed upon them by the Popes of the Holy Market…especially in an era of automation, where the number of jobs are shrinking while global population growth is accelerating. VERY bad combo.

    A less competitive, less efficient, more protected market that’s driven less by over-consumption and debt tends to be more stable and more beneficial to workers. (See unionized factory jobs vs min wage service sector jobs that replaced them) Being able to buy cheaper shit does NOT compensate for having nothing left to pay for it with.

    Someday…We’ve got to realize that WE are the “inefficiency”. WE are the “added cost”. WE & our labour, environment standards etc, are what all these deals are designed to circumvent. WE are the “fat that needs to be trimmed.” But because both US parties and most politicos everywhere are bought & paid for by the very forces benefiting the most…all you get is their version. And these folks are far from geniuses! For example, everything they do now is about unemploying their own customer base.

    That said, actual Trade Wars should be avoided. Huge changes cause huge troubles. Slow, steady, predictable, changes that minimize negative impacts are the way to go. Trump WILL botch this. But just because it’s something he’s proposing, doesn’t mean it’s inherently bad. You gotta look past the Red Team vs Blue Team dynamic programmed into us all.

    1. I put the history in so younger readers realize that there are costs for his actions……costs that could take a decade to rectify….chuq

      1. The young’erns, they don’t even not know how to spell “history” lets alone appreciat-ify it. Theys also don’t unner-stands the coneceptualization of “costs”.

        But yes, despite what our culture thinks, everything comes at a cost. (For example: Cheaper shit means domestic job loses.) Your example is one of the few & more recent examples of tariffs. Mostly because for 30+ years the word “tariff” has only been used within the context of punishing “anti-dumping”, punishing specific countries for trade practices the US gov’t considers “unfair”.

        That’s half the problem right there. We’ve all but lost the very concept of limiting the activity of capitalism. We think they’re gods among men, un-tethered by time & space. Job Creators. Despite the fact their main mission in life is now to eliminate jobs, rather than create them.

        As for costs, it’s likely my home on native land is going to pay the biggest price for Trump’s action. I expect the US is where the majority of our steel & aluminum goes. If this goes south, the minimal industry left in this country will take yet another kick in the nards.

        Speaking of which…Canuckistan just officially endorsed the TPP deal the US luckily avoided.

      2. Got that right.

        The math is just undeniable. (Fewer jobs + growing global population = more competition for less) With predictions of 30-50% of North American jobs ceasing to exist…things are gonna get nasty within a couple of decades. We probably won’t even recognize the place anymore.

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