tag:blogger.com,1999:blog-582368152716771238.post6365628165677005030..comments2024-03-28T14:41:03.793-05:00Comments on The Grumpy Economist: Flowers not tariffsJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-582368152716771238.post-33534261335586928692019-01-01T16:56:31.983-06:002019-01-01T16:56:31.983-06:00"Even in the best case, tariffs and trade res..."Even in the best case, tariffs and trade restrictions are zero sum — they make the US better off by making China worse off. There is no case that they increase the size of the pie. ...<br />The idea that we can use tariffs to threaten China into freer trade is dangerous."<br /><br />Here's the Steelman argument in favor of tariffs, that you imply but refuse to state since you think it is too "dangerous":<br />It hurts China a LOT more than it hurts the US. Therefore, the US can "win" a tariff war, and get China to reduce Chinese tariffs -- so that there is more trade. Because trade is positive sum, and more total trade, after the trade war, will be positive.<br /><br />In no case should the US military, whose biggest 21st century rival is already China, in no case should our security be dependent on China. Having a military manufacturing capability in the US is part of a responsible US Defense strategy.<br /><br /><br />None of this negates the accurate costs and negative effects of tariffs as noted, but either, alone, could be enough to justify tariffs for the desired effect. The failure to mention them explicitly and address them weakens the argument for those who place great weight on them.Tom Greyhttps://www.blogger.com/profile/15046612425809449502noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-8076562126615021992018-12-29T19:02:54.869-06:002018-12-29T19:02:54.869-06:00PPP GDP per capita is what's relevant for livi...PPP GDP per capita is what's relevant for living standards so the U.S./China ratio is about 3.5 to 1, not 6 to 1. larry siegelhttp://www.larrysiegel.orgnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-66086702109337911722018-12-07T09:55:07.300-06:002018-12-07T09:55:07.300-06:00"We should get a grip, set a standard for goo..."We should get a grip, set a standard for good self-interested free-trade behavior, and work with our allies to get China to obey the same rules. Such a China is far more likely to cooperate on security issues than one already at war with us over trade." -JC<br /><br />Precisely. The TPP trade agreement was a step in that direction. Too bad, the President who speaks with forked tongue ripped up the agreement and sent out a very negative, damaging signal about the reliability of contracts with Americans. -Erik<br />Erik Poolehttps://www.blogger.com/profile/02442592238782846163noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-61431043233874468832018-12-06T11:43:40.109-06:002018-12-06T11:43:40.109-06:00well written.well written.freeflixhttps://tricksnation.com/netflix-premium-cookies/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3076085712876590262018-12-06T10:01:56.340-06:002018-12-06T10:01:56.340-06:00That's all correct of course, but the point is...That's all correct of course, but the point is that I don't think the people asking for the tariffs care. They just want to make stuff, in the same places where they (or their parents) previously made similar stuff. And they think big tariffs will help that come to pass.<br /><br />There are four choices here: (1) find a way for those folks to make the stuff they want to make without tariffs; (2) find a way to convince those folks they would be better off not making the stuff (note "they" not "we"); (3) realign political factions so the votes of the people who want to make the stuff no longer decide U.S. elections; or (4) impose tariffs. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-90069243819178441732018-12-05T17:31:37.325-06:002018-12-05T17:31:37.325-06:00"And those people seem to very much want to b..."And those people seem to very much want to be working long hours, for less than stellar pay, in less than ideal conditions, in order to build stuff to ship over to China."<br /><br />I expect they want to make things to sell in America rather than hoping to ship to China. The reality seems to be that America is borrowing a lot of money from Asia and Europe and that when, for example, Japan lends a billion dollars to the US Federal government, it does not ship over bales of yen, it sends a boat load of cars or sends electronic components to China which then sends a boatload of cellphones. <br /><br />The burden of international capital flows falls primarily on tradeable goods sectors. If the United States wants to cut its merchandise deficit in a meaningful way it is going to have to stop with the international borrowing. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-46997478962600598052018-12-05T15:13:41.003-06:002018-12-05T15:13:41.003-06:00"Would we really be better off if we worked h..."Would we really be better off if we worked hard, put the fruits of our labor on boats, in exchange for Chinese government bonds?"<br /><br />Well no, of course not, but that has never been the relevant question. Instead you need to ask something more like: "would swing-voters in the Rust Belt be better off?" That's a bit harder to answer.<br /><br />To avoid any misunderstanding, I am anti-tariff. My point is simply that if you don't want tariffs, you need to convince the people asking for the all the tariffs in the first place. And those people seem to very much want to be working long hours, for less than stellar pay, in less than ideal conditions, in order to build stuff to ship over to China. Or at least they think that's what they want, which I suppose amounts to the same thing in the end.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-27542527378951857222018-12-05T10:31:38.875-06:002018-12-05T10:31:38.875-06:00An import duties serve a dual role: a tax on consu...An import duties serve a dual role: a tax on consumption of the imported article, and a subsidy to protect or to promote a domestic industry or special interest.<br /><br />As duties go, the 25% import duty surcharge on imported steel is hardly remarkable. During the 1990s, the import duty on Mercedes Benz automobiles imported into Malaysia attracted a duty rate of 100% of the C.I.F. cost of the automobile. It didn't stop the importation of Mercedes Benz vehicles, or other German-made automobiles, at the time--it simply made the ownership of those brands more exclusive thereby improving the brands' cache as a status symbol of the affluent and the influential. Admittedly, it would be difficult, today, to envision PRC-made automobiles imported at a duty surcharge of 25% becoming as a result of the import duty more desirable than, say, a domestic Chevrolet, but it's idle to speculate on the notions that today's or tomorrow's American consumer will have in the way of automobile 'chic'.<br /><br />My career was made in manufacturing, from the shop floor to the executive suite. I don't share the author's point of view, but then I'm not an academic. Manufacturing plays an important role in the economy of most if not all developed countries. That those who control the finances of those countries fail to see the importance of a manufacturing sector is, today, a singular error that we will pay dearly for in the future. Yet, that is the situation we find ourselves in--manufacturing is outsourced to an unreliable and repressive country that shares not our values or our social outlook or our mores and norms. Whom would you place your trust in--those sitting to the left of the bouquets, or those sitting to the right of the flower display? If you value your liberty and freedoms, the answer is too obvious to need stating.<br /><br />If an import duty (or "tax", if you will) is the price to pay for a chance to correct that imbalance and improve the country's manufacturing capability and capacity, then amongst all the other useful and not so useful taxes we pay, it may well be seen to be in hindsight money well-spent. Regrettably, most people are current-period oriented--the future is too far off and uncertain to contemplate--businessmen, men and women of finance, and academics not excepted.<br /><br />Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3925423797541695162018-12-05T03:29:25.751-06:002018-12-05T03:29:25.751-06:00Spot on. But unlikely to be heeded by your current...Spot on. But unlikely to be heeded by your current president.Cokerhttps://www.blogger.com/profile/02631288439451432057noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-4169557796827824952018-12-04T09:23:51.436-06:002018-12-04T09:23:51.436-06:00"work with our allies to get China to obey th..."work with our allies to get China to obey the same rules" This, unfortunately, is what the past administrations hoped to do and failed. The whole essay is very nice till the very end. The doctor diagnosed and told the patient just to watch the diet and exercise. Not helping.Jay Chenhttps://www.blogger.com/profile/08472513768394753891noreply@blogger.com