“When asked why Harris has not distinguished herself by opposing these measures, Lincicome notes that supporting tariffs is just part of the “conventional wisdom in Washington today” even if polls may not completely support this assertion. “The view among the political experts is that elections are won or lost in a few places with a few votes,” and those critical “voters like tariffs.”
Given the IMF’s projections, bipartisan support for tariffs could lead to increased costs and slower economic growth for Americans regardless of who wins in November. ”
…
“former President Donald Trump floated a specific 60 percent tariff on Chinese goods alongside a 10 percent across-the-board tariff, which he recently increased to 20 percent. “It’s just what he thinks galvanized an audience,” Scott Lincicome, vice president of general economics and Stiefel Trade Policy Center at the Cato Institute, tells Reason. “Let’s face it, none of this has any rigorous econometric modeling behind it, so it could be as simple as he thinks 20 percent sounds better.”
“Taking the candidates at their word, you would have to say that Trump’s tariffs would be orders of magnitude worse than what Kamala Harris might do, or say she will do,” Lincicome adds.”
“Northeast Asia undoubtedly benefited from capitalism (private profit-driven production), and
from access to the world market. To this extent the mainstream is correct. But five qualifications
have to be made.
First, for the first several decades the Northeast economies relied not so much on ‘the world
market’ as on ‘empire preference’ to the US market—and to US technologies, US capital, US
military and civilian aid, and US public procurement—thanks to their role in the US’s geopolitical
strategy to contain communism and show the world that ‘capitalism’ was superior to ‘communism’.
Second, the US’s threat perception, its commitment to getting front-line allies economically strong
enough to be a credible defence against communism, and its intense involvement in national
economic policy-making and institution building, kept the national elites relatively unified and not
at each other’s throats. So on the spectrum of ‘weak state/special interest state/common interest
state’ these were special interest states moving towards—with a lot of American help in the first
decades— common interest states.
Third, steered by a developmental mindset, the developmental state was organized differently than
the model neoliberal state. The latter has no strong centre of coordination (because markets played
by private capitalists, not states, are the resource coordinating institution), and has arms-length
relations between the various ministries and between ministries and business. The developmental
state has one or a few powerful centres of coordination and market leadership, a limited role for
the legislature in matters of economic, financial, and security policy, and well-developed
mechanisms of consultation and coordination with private capitalists, in the spirit of ‘embedded
autonomy’.
Fourth, these governments made intensive use of policies and institutions frowned upon in the
neoliberal playbook—such as managed trade, sectoral industrial policy (‘making, not picking,
willing winners’), targeted concessional credit, and capital controls. These instruments were
intended to buffer (not insulate) producers in selected sectors from international competitive
pressure and volatility—so profit-raising protection and subsidies came with performance
conditions, which were enforced. The whole complex would have scored poorly by Washington
Consensus criteria. For example, Taiwan’s financial system was and remains the despair of visiting
western economists. That being said, there is no knock-out evidence on the effects of these
‘government interventions’. The causality is too difficult to disentangle rigorously.
Fifth, from early on they undertook to develop domestic technological capacity, such as
engineering faculties at universities and public laboratories, to aggressively seek out western
technologies and domesticate them for deploying in national firms, and much later to undertake
world-standard innovation and attract back a high proportion of overseas graduate students—this,
rather than rely, as in much of Latin America, on incoming western multinational companies.
Singapore, as noted, did rely on western multinationals—which were left in no doubt as to who
called the shots”
The U.S. trade deficit is a problem, and the best way to solve it is by a weaker dollar. Free trade is good, broad tariffs are bad, and the trade deficit is best dealt with by a weaker dollar.
“Former President Donald Trump’s promise to carry out “the largest domestic deportation operation in American history” would not only be a moral calamity requiring an enormous expansion of government—it would also be hugely expensive and ruinous to the American economy.
The governmental infrastructure required to arrest, process, and remove 13 million undocumented immigrants would cost nearly $1 trillion over 10 years and would deal a “devastating” hit to economic growth, according to a report published last week by the American Immigration Council (AIC). The think tank estimates that a mass deportation plan would shrink America’s gross domestic product by at least 4.2 percent, due to the loss of workers in industries already struggling to find enough labor.”
…
“The costs of mass deportation would rebound into the economy in several ways. The economy would shrink and federal tax revenues would decline. The construction industry, where an estimated 14 percent of workers are undocumented migrants, would be particularly hard hit, but the effects would be felt throughout the economy.”
…
“Immigration restrictionists often assume that deporting millions of undocumented workers would allow more Americans to fill those jobs, but the economy is not a zero-sum game. A shrinking economy would be bad news for many workers who aren’t directly impacted by Trump’s deportation plan.”
“The Chinese factory charged me $10 for a cart that cost them $9 to manufacture. U.S. retailers bought it from me for $15, then sold it to consumers for $30.
To recap: The factory made $1, I made $5, and retailers made $15, minus freight and U.S. tariffs.
The freight costs went to shipping lines, U.S. railroads, truckers, warehouses, and America’s highest-paid union workers—longshoremen at the Port of Los Angeles. As for those tariffs: Do the Chinese actually pay them, as former President Donald Trump claims? That would be illegal, as U.S. Customs charges tariffs only to the “importer of record,” which must be a U.S. entity. The monies collected go directly to Uncle Sam and retailers add them to their cost of goods, as with any other expense.
So each Magna Cart created $21 in profits, of which 95 percent went into American pockets. Selling 5 million carts meant a $100 million gain to the U.S. economy. Yet the official trade statistics framed that as a $75 million addition to the trade deficit.”
…
“Wouldn’t American profits be even higher if these things were made in the U.S.A? That’s a big no, because many products simply wouldn’t exist. My original plan had been to manufacture in the United States. Then I saw the factory quotes, and I realized my babies would have to retail for more than $100. Thanks to China, tens of millions of Americans can now carry their chairs and gear to the beach with ease, and move heavy loads without tweaking their backs for under $40. (It used to be $30. Sigh.)
So why can’t we move all that manufacturing to other low-wage countries? Because only China has the massive workforce (800 million strong), the infrastructure, and the natural resources to supply 380 million Americans (plus 7.6 billion others globally) with every gizmo and gadget imaginable.
The nearly $500 billion that America imports annually from China enriches our economy by trillions. The math is so simple, you’d think even politicians could understand it.”
“”Former President Donald Trump’s proposals to impose a universal tariff of 20 percent and an additional tariff on Chinese imports of at least 60 percent would spike the average tariff rate on all imports to highs not seen since the Great Depression,” warns Erica York of the Tax Foundation.
Trump has actually been a little vague on the size of his universal tariff, first floating it at 10 percent while allowing “it may be more than that,” and then upping the ante to 20 percent. Either way, it’s a cost that ends up being largely paid by Americans in terms of higher retail prices and more expensive imported parts and materials for domestic manufacturing.
The Trump administration’s 2018 “tariffs resulted in higher prices for a wide variety of goods that U.S. consumers and businesses purchase,” the Tax Foundation’s Alex Durante and Alex Muresianu concluded.
Even when tariffs don’t directly affect the cost of imported goods purchased by consumers, they still drive up the prices of many things made in the U.S. The Cato Institute’s Pierre Lemieux points out that “a tariff on an input (say, steel) is paid by the American importer who will typically pass it down the supply chain to his customers and eventually to the consumers of the final good (say, a car).” Instead of boosting domestic production, that can do harm, instead.
“For manufacturing employment, a small boost from the import protection effect of tariffs is more than offset by larger drags from the effects of rising input costs and retaliatory tariffs,” Federal Reserve Board economists found when they researched the 2018 tariffs.”