Forum Post: Tariffs are a bad idea - Not a way to grow economy
Posted 12 years ago on Dec. 3, 2011, 7:34 p.m. EST by theaveng
(602)
This content is user submitted and not an official statement
In June 1930, over the objection of many economists, Congress approved and Hoover signed into law the Smoot–Hawley Tariff Act. The legislation raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression now spread through much of the world, and other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression.[44]
China and Brazil have tarrifs and they're doing alright
The U.S. has tariffs too. The issue is not tariffs, but raising them to the point where you make European, Canadian, Russian, and other governments BLOCK your goods with equally punitive tariffs. You will kill our overseas sales.
Also:
Brazil is the country that kidnaps U.S. children and then the government refuses to return them to their proper parents (even though treaties require them to do so). I wouldn't hold that banara republic as some "shining example" of a working society.
Nor China.
They're still doing well economically speaking.
They just happen to believe that economics is not a religion and that protectionism is not a bad word.
Australia has around 800 import products with tariffs, the US around 200. Brazil places stiff tariffs on electronic imports, but drop them if a product is partially manufactured there. That's why most US technology companies have plants there. US Corporations spend millions of dollars in lobby money just to make sure import tariffs are low or non-existent, so they can keep their sales of junk products high and stock holders happy.
Your first sentence was good, but your second sentence made you sound like Alex Jones. Nobody said economics was a religion. Nor did they say protectionism is a bad word (after all we have a navy to protect our shores).
What "they" say is that Tariffs will stat a trade war, which will cause foreign markets to be closed-off to U.S. goods. And then I will lose my job (because I write software whose main market is Europe, Russia, China, et cetera). Why do you want me and other engineers to lose our jobs?
That's heartless.
tarrifs can only be implemented effectively through exports/imports.
If you write software, you can sell activation codes.
Software is considered an export as well, and is strictly regulated by the government (because of concerns it might reach rogue states like Iran).
So the tariffs would be applied to the software (by Europe and other places) causing customers to stop buying our stuff & buy locally instead. That would be bad for me and my fellow engineers, who would be laid off due to reduced revenues.
"So the tariffs would be applied to the software"
Well if they're not beneficial in any way then I don't see why the government would impose tarrifs on software.
Tarrifs on manufacturing on the other hand would beneficial to 99% of the population.
Bullshit: http://economyincrisis.org/content/impact-smoot-hawley-tariff-great-depression
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No, Smoot Hawley didn't make much of difference at all. That's a tired old song you're singing. You and the Koch bros.
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Seriously, you don't know who the Koch bros are. You must be posting from a distant planet. I didn't know they had internet service on Uranus.
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So you use this ploy every time you espouse unpopular ideas and are voted down?
Yeah, that accusation is getting old.
Good article: http://ourfuture.org/blog-entry/2009093814/myths-protectionism-stories-you-are-likely-hear-wake-china-tire-trade-tarriff-
Seeing that the market crash of 1929 and also bank runs/ failures happened also in1929/1930 which was BEFORE smoot-Hawley your argument is false.
And seeing that the Tariffs in question were on mainly agricultural products (noticed you used the word items instead? misleading?)
Then these would in no way affect finished goods production whatsoever, which was the problem.
After smoot-Hawley farm incomes actually rose for first time in 11 years, so, if anything, it lessened the depressions impact.
Smoot-Hawley, one can argue (via Wiki, and it's references) had little impact on the Depression. (http://completelybaked.blogspot.com/2011/01/smoot-hawley-argument-imports-red.html) One can also argue that periods of greatest US prosperity occurred when tariffs on imports were greatest. (http://completelybaked.blogspot.com/2009/05/free-traders-friends-or-foes-im.html)
Peace, Jim Welke
The Smoot-Hawley Tariffs had an overall ~20% negative impact on the decline of GDP according to http://economyincrisis.org/content/impact-smoot-hawley-tariff-great-depression. To say it had "zero" makes no sense.
The other countries of the world will set up tariffs, which means those other markets will be closed-off to U.S. products.
Millions of people (including myself) will have to be LAID OFF from their jobs, because we will lose overseas markets. I don't feel like being laid-off from my job because of some damn tariff that causes my product's sales to plummet into the abyss.
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It's a trade deficit. Meaning, all things being equal, if hypothetically we sourced 100% of goods/services domestically but sold nothing abroad, there would be less wealth exiting the country than there is today. Of course, prices would be higher but so would employment and wages. National self-sufficiency would be nice.
But that's extreme. What we can do is level the playing field a bit and reduce some of the radical advantages labor markets like China have.
Domestic demand would not stop. It might decrease relative to prices but more of the revenue generated would have a domestic multiplier effect.
You really don't get it, do you. Protecting the US economy would not likely cause you to lose your job. It would tend to increase domestic sales. Your income prospects would be increased not decreased.
Didn,t anyboby tell you, WE HAVE A HUGE TRADE DEFICIT. Smoot Hawley didn't do squat.http://www.americanthinker.com/2011/01/smoothawley_and_the_depression.html
That link says Smoot-Hawley tariffs are to blame for 20% of the GDP's decline. 20% is much greater than "no impact".
Yu know who else supports stong tariffs? Reagan's righthand man Patrick Buchanan. He also wants to seal the borders so Mexicans can't dilute the purity of America. That's some mighty great company you keep there.
Damn those inconvenient truths.
No, it says there was a 21% decrease in exports. Not that it was due to the tariff. The whole global economy had crashed. There were far less imports, exports and consumption everywhere. Nothing to do with Smoot_-Hawley. If you still think it did, then explain why the much larger tariffs Of the Fordney- McCumber bill in 1922 didn't cause a depression.
lol, ya right; that's about as funny as saying the current system with the massive trade deficit is just humming along without so much as a hiccup.
How many jobs have to leave before you figure out that when you throw open your borders and put yourself in competition with over 6 Billion other people, your standard of living starts to slide into third world territory?
What American products are they going to impose tariffs on? Government bonds, Hollywood movies, or perhaps shipments of tear gas to Egypt?
"How many jobs have to leave before you figure out that when you throw open your borders and put yourself in competition with over 6 Billion other people, your standard of living starts to slide into third world territory?"
how long do we need to continue sliding into third world territory before we figure out that the we can't sit on our fat asses and expect our technological superiority to collect a paycheck for us anymore? the world doesn't revolve around the US and chinese businesses are sure as shit to drive american companies out of business as soon as the opportunity arises.
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Bullshit, ridiculous ass backward bullshit. It's lack of tariffs that has caused job loss.
Even your OWN LINK said that the Smoot-Hawley Tariffs had an overall ~20% negative impact on the GDP.
Since you didn't listen to me the first time, I'll repeat it. The other countries of the world will set up tariffs, which means those other markets will be closed-off to U.S. products.
Millions of people (including myself) will have to be LAID OFF from their jobs, because our sales will plummet by 75%. Or more. This is the plain truth.
No more; Microsoft factories moving to China, Ipod factories moving to China, MORE sales from our own factories to the worlds largest consumer market,us here in the US. Millions of jobs returned to our economy.
If the most profitable industry is actually the entertainment industry, there is a pretty serious problem.
Incidentally, I'm in favour of tariffs directed at labour disparities only. So it would only apply to foreign produced products which do not pay their workers wages which are in line with first world standards for the same goods/services. (Not Europe)
Like any government solution, it wouldn't be perfect; but it would eliminate the ability of companies to exploit cheap third world labour if they wanted to sell products domestically; or if they really wanted to keep their foreign factory, fine, but the tariffs would help offset the loss of tax revenue.
Its time to act though, I would prefer a new system than capitalism (and not socialism) but since its all we have at the moment, I think something has to be done to get industry back. The alternative is what? financial collapse.
I'd be okay with tariffs against China (for mistreatment of workers), but we have to remember that China will respond in kind. You can forget about shipping products like cars or computers or movies or phones or software to China, because they'll make U.S. goods cost 5 times more than the local chinese stuff.
Who in the heck here ever said anything about tariffs?!!
couldn't a tariff be seen as a stick or sanction. a way to entice other nations to negotiate.
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