A tariff is a sharp edged tool used to carve out the best trade deals for America. It is used to raise the price of imported goods as a defense against unfair competition from foreign markets. And like any other tax a tariff doesnt have to be universal or permanent: it can be limited lowered raised imposed and repealed as needed.
Even the saber-rattling threat to employ tariffs is so effective that it intimidates any nation who may harbor thoughts of fleecing the U.S.
In Article I Section 8 of the Constitution the Founding Fathers gave Congress the power to regulate commerce with foreign nations." The Framers encouraged sanctions duties and fees as legitimate revenue-raising measures: the second bill signed by President George Washington was legislation establishing tariffs; President James Madison proposed a five percent duty on all imports; Thomas Jefferson admonished Congress in 1806: We ought not to depend on supplies from other countries. Shall we suppress imposts tariffs and give that advantage to foreign over our own domestic manufacturers?"
Targeted import taxes allow domestic start-up companies to compete on a level playing field with state-subsidized foreign corporations. Case in point: Brazil produces nearly half of the worlds sugar and uses that status as leverage to manipulate the market. According to Britains
Financial Times the Brazilian government plans to underwrite its sugar industry to the tune of $1 trillion over the next ten years.
Tariffs quotas and embargoes also protect American manufacturers from foreign goods produced by forced labor and in sweatshops that employ" children. In 2016 the Department of Labor identified 139 products from 75 countries using such practices.
New and higher tariffs would help finance a cut in income tax as candidate Donald Trump promised. If the price of some imports rise trimming consumer tax bills would be a nice trade-off.
Conservative ideologues who fear using tariffs should note that Ronald Reagan levied a 100 percent tariff on selected Japanese electronics a 50 percent tax on Japanese motorcycles being dumped on the U.S. market and put quotas on Japanese auto imports steel and machine tools. He was an America-first free trader.
The failure to use tariffs effectively has resulted in a $58 billion trade deficit with Mexico. The U.S. trade deficit with China currently stands at $367 billion. China is flooding American markets with cheap goods but pays just about three percent on its exports Mexico averages 0.1 percent!
Last year the U.S. charged $34 billion (1.5 percent) in duties and fees on $2.2 trillion in imports. This is a crises that needs to be addressed: our total trade deficit amounts to $539.8 billion up from $508.3 billion just two years ago and shows no sign of tapering off. According to the Economic Policy Institute between 2001 and 2015 there were 3.4 million fewer jobs for American workers due to mounting trade deficits.
President Trump wants to raise the admission fee for the privilege of doing business with the U.S. In doing so he has proven to have an ear for Middle Americas concerns.
- In a March 2016 Washington Post poll on trade 53 percent of Americans felt free trade policies cost more jobs than created new ones.
- A July 2016 CBS News/New York Times survey asked has the United States gained more or lost more because of globalization?" Thirty-six percent of respondents thought more jobs were created while 56 percent felt free trade policies lose more jobs.
- Just last week Rasmussen Reports polling revealed that 56 percent of voters agree with President Trumps decision to pull the United States out of the Trans-Pacific Partnership."
The 6000-page Trans-Pacific Partnership deal is the largest trade treaty in U.S. history. TPP mandates would force the U.S. Brunei Vietnam Mexico Malaysia and other Pacific nations into a one-size-fits-all trade policy. The arrangement even encompasses such non-trade issues as food safety standards Internet traffic regulations restrictions on generic medications and foreign supervision of U.S. financial transactions.
The
Wall Street Journal estimates that by 2025 the Trans-Pacific Partnership will increase the U.S. trade deficit in auto assembly and car parts by $55.8 billion a year. Free" (not fair) trade policies have American autoworkers competing against Vietnamese laborers who earn a minimum wage of 56 cents an hour.
TPP is a sweetheart deal for a powerful cabal of political globalists Wall Street moguls and multi-national corporate elites the One Percent who set in place international trade rules promoting their trademarks copyrights and patents abroad and protecting their franchise agreements securities and loans.
Incredibly the Trans-Pacific Partnership was cobbled together in secret: 600 corporate trade advisors" (read lobbyists) were consulted by Obama administration trade techies but the treaty draft was withheld from Congress governors state legislators the press and the public.
In an appearance on the Bill Moyers TV program Dean Baker director of the Center for Economic and Policy Research stated: TPP really is a deal thats negotiated by corporations for corporations and any benefit it provides to the bulk of the population of this country will be purely incidental."
The shock and awe reaction to President Trumps threat of imposing new and higher tariffs is simply political posturing. The International Trade Commission lists over
twelve thousand specific tariffs the U.S. imposes on imports.
Some Republicans shout trade war" at any hint of an America-first trade policy. However economist Ian Fletcher author of
Free Trade Doesnt Work states:
If you Google the trade war of you wont find any historical examples. There was no Austro-Korean Trade War of 1638 Panamanian-Brazilian Trade War of 1953 or any others. History is devoid of them. And please dont respond with that old canard about the Smoot-Hawley tariff of 1930 starting a trade war and causing the Great Depression. It doesnt stand up according to economic historians from Milton Friedman on the right to Paul Krugman on the left.
International trade is not a competitive contest its a geopolitical war. To defend America on the economic battlefield Washington Hamilton Henry Clay John C. Calhoun and every Republican president up to Eisenhower understood the use of tariffs as weapons. The U.S. is the largest market on planet Earth so we have the high ground. President Donald Trump has now joined the fight we should have his back.
