Because he has an outdated incoherent understanding of economics.
Tariffs yes, can protect nascent developing economies if the country has the manufacturing prowess and wants to limit competition from foreign companies. This worked well for the USA during the 1800s to early 1900s, a period where the USA was the manufacturing envy of the world.
However, as countries get more developed the economy transforms and transitions away from a manufacturing economy into a service economy. Wages and salaries rise and the highest paying jobs are usually white collar jobs, not blue collar jobs. This is why the USA no longer is a manufacturing behemoth anymore is because it transitioned into a service economy.
Basically, the lower income countries and developing countries like Bangladesh, Vietnam and yes China still are manufacturing giants because they have cheap labor available and their economy still hasn’t fully transitioned into a service economy yet. Developed countries tend to be service economies because white collar jobs are the ones making the highest wages in those economies.
Tariffs doesn’t work well if the country is a service economy. Service economies (ie. developed countries) don’t have the manufacturing infrastructure anymore. That’s why they need to import products from developing countries which have specialized in those manufacturing sectors or make them overseas in the cheaper lower income countries. That’s why since the 1960s, the USA has been outsourcing most of its manufacturing.
It’s pretty much near impossible to transition it back to a manufacturing economy, wages would have to be reduced and the infrastructure would take decades to build. So implementing a tariff in the modern era economy is basically just tanking your own economy. US companies often have no choice but to still import parts from foreign countries or make them abroad, incurring tariff costs ultimately leading to higher prices for consumers.
Found these comments on a Republicans for America Facebook page. Just demonstrates the fact that these MAGAs just follow their leader Trump and don’t have any understanding of how the global economy works. Having a trade deficit doesn’t mean other countries are ‘unfairly taking advantage of the USA’ it just means the USA is importing more from them than they are importing from the US. You cannot force every other country to consume the same amount from you that you consume from them, that’s utterly ridiculous and illogical. Having trade surplus and trade deficits are a natural state of the global economy because every country specializes in different things. These MAGAs just clearly don’t have any kind of understanding of basic economic principles. Which country in the world has zero trade deficits with every other country? Every country is taking advantage of other countries’ specialties, that’s how global trade works. If you want to call a trade deficit ‘unfair’ well then every country in the world is unfair to every other country.
I actually couldn’t believe some of these comments. “Stock prices aren’t an indicator of the economy” “I would rather be poor and live in a county that makes things” I can feel my IQ dropping after reading these smh
…cannot believe how many morons are online
Leave a Reply