...there is going to be a lot of insane talk about trade and so-called trade battles with China, Japan, Mexico, etc.
Walter Block, a couple of years back, brilliantly exposed the fallacies of the anti-free traders.
Find the time to watch this lecture. The arguments he presents here can be used to explain to those who fall for Donald Trump confusion about trade.
-RW
A couple years back?
ReplyDeleteLOL at "a couple years back"!
ReplyDeleteI understand tariffs are a tax on citizens & cheaper imports may increase jobs for downstream users or buyers of such products even if closing businesses & laying off workers producing the same goods, i.e. a net gain.
ReplyDeleteThat said, Mexico slapped a tariff on ~100 US products to force us to allow Mexican trucks to enter the US for deliveries. We finally agreed a few years later & Mexico dropped the tariffs. So for some years Mexican citizens paid “taxes” on ~100 US goods, but (presumably) thereafter for decades or more, the taxes on the Mexican citizens are lifted AND Mexican truckers, business & labor profit. FOR DECADES at the cost of a few years.
OK, I'm not an economists. Why was this not a good idea for Mexico to do?* If Trump threatens or does slap a tariff on Chinese goods for a while and they drop their tariffs & other restraints (like demanding we build the plants in China, etc) so that we produce more goods (which is one way we pay for stuff we import) & US business & labor increase their production & profits for DECADES, why is this not worth trying?
*Note: If the argument is NAFTA required us to & it had nothing to do with it, I don't accept that the imposition & dropping the tariffs was coincidental.