Raise tariffs on America

[Dinner]

I agree that increased trade will eventually lead to greater prosparity in the long run but I am deal specifically with the issue of how to move highly protected economies into a free trade economy while causing the least amount of harm to the citizens.

How would you move a country like Belarus or Tajikastan into a free market capitalist system without making vast numbers of people unemployed in the process? I'm advicating a slow approach.

[DrSpike]

A reasonable statement, and as I said, how it would happen in practice anyway. But please bear in mind my comments on some of your earlier posts.......to be fair you initially made the statements I objected to about Japan and the US, which of course are not Belarus.

[DanS]

The last time I checked I was here for entertainment, not to participate in a debating society.

KH trolls so that others make the arguments, while he does the easy one-liner work of refuting them. DanS conclusion: KH doesn't have a string of coherent thoughts in his head about trade and can only do the one-liners.

Politically-motivated protectionism

Yeh, well, duh. Thanks for your contribution.

and reneging on at least the spirit of the NAFTA agreements

Go look at the amount of trade that flows between the US and Canada under NAFTA and compare it to the industries impacted under these tariffs. You will find that even though Ben Kenobi's community might be impacted by this disproportionately, and it's a stupid thing to do economically (more negative for us than for you), these tariffs impact only a small part of our overall trade (by my calculation, less than 2%). Even then, the volume of tariffed goods will only decrease--not be stopped outright.

Would you cancel NAFTA because of this? Unless you're a fool, the answer is no. Is NAFTA in danger because of this? Not on your life. We're both making too good of money on the deal.

[Ramo]

Yep, Shrub is a protectionist through and through. He makes symbolic rhetoric and gestures about promoting free trade through a few relatively insignificant bilateral agreements, but then turns around and supports a number of far more substantial protectionist measures, from agrisbusidies, to steel tariffs, to textile quotas. Just a couple weeks ago, he imposed quotas on Chinese bras, dressing gowns, and nit fabric (so now they're threatening to join the EU in imposing retaliatory measures on US imports). That nimrod in the white house is gonna set off a trade war one of these days.

And I don't think he's going to back down on steel or anything else. Last week, after the trade talks in Miami pretty much dissolved, Greenspan (according to the WP) warned, not specifying any specific contries or measures, that "some clouds of creeping protectionism have become increasingly visible on today's horizon."

[General Ludd]

DanS - the new Fez?

[notyoueither]

Originally posted by DanS
Go look at the amount of trade that flows between the US and Canada under NAFTA and compare it to the industries impacted under these tariffs. You will find that even though Ben Kenobi's community might be impacted by this disproportionately, and it's a stupid thing to do economically (more negative for us than for you), these tariffs impact only a small part of our overall trade (by my calculation, less than 2%). Even then, the volume of tariffed goods will only decrease--not be stopped outright.

Would you cancel NAFTA because of this? Unless you're a fool, the answer is no. Is NAFTA in danger because of this? Not on your life. We're both making too good of money on the deal.

That's not the point, Dan. The point is that many people in a specific region of Canada are being seriously disadvantaged by the behaviour of your government on trade with Canada. Like losing jobs and homes disadvantaged, not just paying more for a new home.

Furthermore, the level of stupidity of your government apparently knows no bounds. You've heard they have imposed tarrifs on certain strains of wheat, yes? That's right. Canada provides zero subsidy to its farmers except in cases of catastrophe or large scale crop failures, but your government seems to think that our farmers have an unfair advantage in growing wheat because there is a board that handles all international sales of specified types.

The wheat tarrifs are pretty small, but add them to the large scale damage being done to the economy of BC by your repeated tactics with softwood (this is not the first round btw, and Bush was not the originator) have some people thinking maybe we should impose a 100% export tarrif on natural gas, or something like that, to get the attention of the pin heads in Washington.

Of course, we would not worry to much for Americans. Afterall you buy lots of stuff from us and we buy lots of stuff from you. So it'll be all good.

[notyoueither]

Oh, and yes NAFTA is in danger. There are people in Canada who want us out of it. The moronic actions of your government give them the ammunition they need to make a case that such a stupid act on our part could be a good idea if seen in some lights.

[DanS]

That's not the point, Dan. The point is that many people in a specific region of Canada are being seriously disadvantaged by the behaviour of your government on trade with Canada. Like losing jobs and homes disadvantaged, not just paying more for a new home.

Is my sympathy with them supposed to change my thoughts and actions about the wisdom of the tariffs? People are losing jobs and homes in Wheeling, West Virginia because of free trade too. Are we supposed to increase tariffs on steel because of this?

It's not good to look at narrow interests when we talk about trade. The broad interest is where Canada is on the firmest ground in these arguments. But the strongest of Canada's arguments is that it is in the U.S. broad interest to remove these tariffs. Again, the U.S. is hurt more on the whole than Canada by these actions.

Remember that I advocate Canada putting on retaliatory tariffs. This would increase the cost to us and make it harder for our politicians to justify the tariffs. We'll have a good trade war or two and then all of the tariffs (and subsidies) will be chucked out.

[HershOstropoler]

Originally posted by Oerdin


A Euro is complaining about protectionism?!

Why don't you go check some of the extreme protectionist measures the EU has put in place. How high is the tarrif on foreign made autos in the EU? Geee, it looks like you still cap the total number of cars which can be imported as well. Your fat cat farmers are getting well over twice the subsidies ours are getting and you bastards flat out lied to us about removing the subsidies. The EU said that if America removed its subsidies then the EU would as well; the US killed off its subsidies for four years and then the bastard Euros increased their farm subsidies. Then when the US got tired of waiting for the EU to make good on its promise and reimposed farm subsidies at less then half it's previous level we had to listen to hypocritical Euros bellow about how "unfair" the US was.

Also look at the EU's steel regime. The government mandates that each countries' producers get a certain percentage of market share reguardless of market demand and it also puts up big road blocks to prevent foreign made steel from taking to much of the market. Compared to this the US's anti-dumping laws are child's play.

Telling that fairytale again and again will not change that it is a fairytale. I'll just pick the most ridiculous one, tell me more about our steel market regime! That should be entertaining.

[KrazyHorse]

Originally posted by DanS
KH trolls so that others make the arguments, while he does the easy one-liner work of refuting them. DanS conclusion: KH doesn't have a string of coherent thoughts in his head about trade and can only do the one-liners

KH conclusion: KH has other things to worry about, like how to do plane-wave renormalisations and how to motivate himself to correct the latest assignment which has been turned in to him on magnetostatics in materials. He thus engages in easy one-liners because work makes him tired and care very little about anything political. As a matter of fact, KH can recall a time when he argued seriously about these things on Apolyton, 2 years ago...

[HershOstropoler]

Those were the days...

[Ramo]

Your fat cat farmers are getting well over twice the subsidies ours are getting and you bastards flat out lied to us about removing the subsidies. The EU said that if America removed its subsidies then the EU would as well; the US killed off its subsidies for four years and then the bastard Euros increased their farm subsidies.

Following Roland's lead, I'll have to call bull**** on this. As I pointed out last time you posted this, we never killed off our agrisubsidies. In 1996, the form of US agrisubsidies was shifted from price supports to fixed payments, which in fact tripled the total amount of payments to farmers. (source: http://www.bartleby.com/65/ag/agrisub.html)

[Ben Kenobi]

Don't cry for Canada. Canada benefits hugely by a free trade zone with the US. Most of its population lives within 50 miles of the US border and a very large portion of the Canadian economy is US trade related.

True. But why is it when you hear about NAFTA in the US, that the deal has been overwhelmingly negative for Americans, with all the jobs lost to Mexico?

Free Trade has been overwhelmingly positive for both countries, and I would like to see the US really commit to the principle in the case of lumber.

What's happening right now is that the inefficient mills are starting to die off in Canada, (which is a good thing), because the ones that survive are efficient enough to compete with the American mills even with the 28% tariff.

So I see two responses for the Americans. Raise tariffs even higher, or to work out some sort of agreement restricting the amount of lumber admitted into the US. These two sad-sack solutions are the only hope for the US to retain their share of the domestic market.

Now, suppose they dropped the tariffs, then all the US mills would be forced to modernise to be where the Canadians have had to be 5-10 years ago. Protectionism won't revive a moribund industry.

[DanS]

True. But why is it when you hear about NAFTA in the US, that the deal has been overwhelmingly negative for Americans, with all the jobs lost to Mexico?

I have no idea why they would say this. Or at least I have no idea why anybody educated in the field would say this.

Anyway, the US hasn't had a trade surplus with Canada since at least 1986. If you believe that a trade deficit loses you jobs, or that trade surpluses gain them (neither or which is true), then you will believe that NAFTA has been a loser.

As for the rest of your post, I agree, although I would say that Canadian soft lumber producers aren't necessarily the most efficient. Like any business, US soft lumber producers will sell for what the market bears. If the Canadian soft lumber has a tariff, then US soft lumber producers will likely just raise prices while giving away the same market share. This is why tariffs are pretty bad at reviving moribund industries.

[Ben Kenobi]

DanS:

Look at some of the protectionist Democratic presidential candidates. They make the exact same argument I just gave.