Raise tariffs on America

[Ben Kenobi]

I don't rant much, but here goes.

Why is it when the US initiates tariffs against Japan or China, these countries respond by raising tariffs for goods sold to America?

Or in the Canadian example. The Americans currently stiff us with a 28% tariff on all softwood lumber, in order to prop up their obsolete mills and lumber industry. Why don't we start raising prices on all of our electricity, and our oil that go the US?

The Americans have taken cheap and easy Canadian power and oil, IIRC, we are the largest supplier of oil to the United States, yet you never hear about Canada's contribution down south. We are like the wife that always waits while America toys with their mistresses.

[Solly]

Because it wouldn't be in Canada's interest?

[Provost Harrison]

There should be international agreement on increasing tarriffs on the US, or alternatively, unless they reverse the protectionist situation, for international embargoes to be placed on their products.

[DrSpike]

Well we have the WTO.

Unfortunately the most powerful economy in the world needn't always obey their rules.

And BK its the first tenet of International Trade........Bodds is correct, you don't impose tariffs on American goods in response because the burden falls mainly on your citizens, just as the burden of America's burgeoning protectionism falls on theirs.

[General Ludd]

Originally posted by Park Avenue
Because it wouldn't be in Canada's interest?

No, because it wouldn't be in the USA's interest.

[Spiffor]

Isn't Canada supposed to be in the North American Free Trade Area?

See? It is illegal for you to raise tariffs on the US !

[HershOstropoler]

NAFTA is a joke. I always was in favour of Canada joining the EU.

[Sava]

good point Kenobi...

America is the land of hypocrisy... we claim to be for capitalism and free markets, yet subsidize inefficient and wasteful private industries. Look at the newest Medicare bill that passed. Conservative estimates put the cost at $400 billion... with over $225 billion in direct subsidies for pharmaceutical and insurance companies. It's all pork. Our government is corrupt. Corporate lobbyist pay millions to get these pork legislations through. It's sad that the effects of America's corruption are felt worldwide...

I can only hope that one day the American people wake up and realize that both parties are ****ing us.

As Hitler said, "How lucky for those in power that people don't think."

[Shi Huangdi]

Re: Raise tariffs on America

Originally posted by Ben Kenobi
I don't rant much, but here goes.

Why is it when the US initiates tariffs against Japan or China, these countries respond by raising tariffs for goods sold to America?

Or in the Canadian example. The Americans currently stiff us with a 28% tariff on all softwood lumber, in order to prop up their obsolete mills and lumber industry. Why don't we start raising prices on all of our electricity, and our oil that go the US?

The Americans have taken cheap and easy Canadian power and oil, IIRC, we are the largest supplier of oil to the United States, yet you never hear about Canada's contribution down south. We are like the wife that always waits while America toys with their mistresses.

It's actually the case that a nations benefits economically by with less restrictions on trade no matter what ohter countries are doing.

[Spiffor]

Re: Re: Raise tariffs on America

Originally posted by Shi Huangdi
It's actually the case that a nations benefits economically by with less restrictions on trade no matter what ohter countries are doing.

Wrong.
Open Market and restricted markets can both prove efficient or inefficient policies, depending on the context. For example, South Korea (and any other developed East Asian country) can thank its development on internal markets that have been closed for decades, while other countries had theirs open.
Had South Korea been an Open Market from the beginning, it wouldn't have seen powerful industries emerging. OTOH, South America relied on closed markets for too long, and ended up with obsolete factories, even though they were quite modern when they were first built under protection. That's why most South American economies are still shaky, despite starting their development sooner than East Asia.

[DrSpike]

Re: Re: Re: Raise tariffs on America

Originally posted by Spiffor

Wrong.

Actually Shi is correct.

What is more virtually all development success stories since 1960 (including South Korea) have resulted from export led growth and an increase in trade as a proportion of GDP.

[Spiffor]

Shi defended the idea of keeping one's own market open, however close the other markets were.

South Korea disproves that such is the One Best Way.

[DrSpike]

Shi is correct, because the case for free trade in the domestic country does not depend on the actions of others.

What is more South Korea is the textbook example of a poor country that prospered on the back of export led growth. This was not because formerly closed markets helped it 'create strong industries'..........it has been shown time and time again that protected industries perform very badly, and that policies promoting domestic champions are usually flawed. It was precisely when South Korea abandoned such policies that it developed quickly.

I can provide references if you'd like to learn more.

[Spiffor]

Originally posted by DrSpike
I can provide references if you'd like to learn more.

I'm sure curious. I thought of SK as the archetype of "educative protectionism"

[DrSpike]

Sure thing........a great entry level reference to International Trade is International Economics: Theory and policy by Obstfeld and Krugman. That's the text I use.

More specifically about Korea, loads of work has been done on the factors underlying their rapid development and the development of other Asian economies over the same period. Most pieces I have are academic papers, but I recall a great largely descriptive World Bank piece that discusses the effect of industrial policy in the 'tiger' economies that might interest you.

I'll try and dig it out Monday.