Free Trade Or Fair Trade

Just the other day Pres. Trump signed his EO on tariffs on steel and aluminum imports  in doing so he has started a debate on free trade….many do not see his tariffs as good for the notion of free trade and still others think that free trade is a cornerstone of conservatism…..but is it, that cornerstone?

The American Conservative spotlights this in a recent article….

According to a recent analysis in the New York Times, President Trump’s “isolationist” trade policy is “at odds with longstanding conservative orthodoxy about the benefits of free and open markets.” The reader is further told that the president is under pressure from his working-class base, which is obstreperously demanding that protectionist taxes be placed on imported steel and aluminum.

I say not so fast.

The Times presents the GOP base’s supposed impatience with free trade as a departure from almost sacred Republican beliefs, and free trade itself as a permanent conservative characteristic. Their evidence is that large corporations favor free trade while labor unions have generally been more protectionist.

TAC also takes a look, a historic look, at tariffs…..

America’s first great protectionist political figure was Alexander Hamilton, George Washington’s treasury secretary. And compared to later mercantilist politicians in our history, Hamilton wasn’t even that much of a protectionist. His original U.S. tariff bill imposed an average taxation level of just 8.5 percent on imported goods. And Hamilton argued that any protection encompassed in those duties, as opposed to revenue requirements, should be discontinued as soon as protected industries established themselves in the American economy.

Hamilton’s opponents, the early American free traders, feared he had created a monster, while northeastern industrialists, particularly in Pennsylvania, predictably argued that protection should be substantial and permanent to ensure national prosperity.

It is too early to tell if the Trump tariffs will be good for the country or not…..steelworkers union seems to think it will be but many economists see it doing the opposite for the country.

Trump has already exempted some countries from his tariffs….that right there tells me that he is not serious.  If you are going to impose tariffs then it should be on all involved not a select few.

Time will tell whether good or bad.


5 thoughts on “Free Trade Or Fair Trade

  1. I wanted to pick up on a point I half-made before…that the chaos supposedly caused by the Depression Era agricultural tariffs is a bad example. (It’s also worth mentioning that the further back you go, the more important tariffs were to the national treasury and the opposite for income taxes. Just another factor to consider.)

    To keep it short, America was still quite agrarian then and protecting that way of life was important to the nation as a whole…as seen by the Great Depression…where what started as a Dust Bowl had huge rippling effects throughout the economy. The stock-market collapse, while intensifying everything, mostly just showed how stupid the stock market and the financial industry as a whole is/was. The situation was already a huge clusterfuck without tariffs.

    It wasn’t about farmer’s ability to sell their commodity. That wasn’t a major problem. The problem was that huge swaths of farmers just could no longer grow their crops at the levels they used to…if anything at all. A tariff can’t make it rain. That’s what was needed. So the tariff could only ever have been of marginal/regional use anyway. That makes a true cost-benefit analysis impossible.

    Factory made products like steel and aluminum that go into other products, however, are another kettle of fish entirely. And the timing for such an action is considerable better now than during an economic crisis. That said, (unless a viscous Trade War is started by a half-cocked hothead) I don’t see this 2 product tariff as having too much of an impact on America either way. Other countries (ie Canuckistan) have more to lose.

    Worth a shot, at least.

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