Man having idea

From Dr. Madsen Pirie:

Many things in the USA use aluminium or steel. It’s not just cars, white goods and buildings; it’s little things like the foil in cigarette packs or the safety caps on medications. By putting tariffs on foreign steel and aluminium, President Trump is making American manufacturers pay more to make their goods, and raising the prices they pass on to their customers. He’s enabling US producers of those metals charge higher prices than they otherwise would. American consumers will be poorer.

Not to be outdone, Jean-Claude Juncker, President of the European Commission, has threatened to retaliate by making EU citizens pay more for their Levi jeans, Bourbon whiskey and Harley-Davidson motor-cycles. He could have taken the US to the WTO Commission to have Trump’s tariffs struck down, but instead he chose to make his citizens poorer.

I prefer Teslas to Harleys, but I do wear Levis and I do mix the odd Bourbon into cocktails. Now I’ll have to pay more because President Trump has chosen to hurt his own citizens. There is a word for this:- Insanity.

Support Continental Telegraph Donate

8 COMMENTS

  1. Not to be outdone, Jean-Claude Juncker, President of the European Commission, has threatened to retaliate by making EU citizens pay more for their Levi jeans, Bourbon whiskey and Harley-Davidson motor-cycles.

    Ironically those are mainly luxury(-ish) goods so a higher price might mean people consume more of them. At least they will continue to consume about the same. Consider who is buying Harley-Davidsons these days. Late Middle Aged men contemplating their imminent death are unlikely to be put off by another 10%. More expensive bourbon?

    However so far all I see is a lot of posturing. Whether it comes to anything is another matter.

  2. What happens to tariff income after it is syphoned from the pockets of your own citizens? The government gets it. IF that same government were to use it to pay down debt or to reduce iniquitous taxes elsewhere the net effect on the population would be nil. Apart from that minor detail of domestic production costing more and being free from competition. That’s why the tariffs have to be lifed. Domestic producers deserve a chance, not a sinecure.

    • No, that is the closed-system argument, under which it wouldn’t matter how high or low tax rates were because all the same money would continue to slosh around. Your IF is a big, as the drain-the-swamp President has not seen fit to shut down even Export-Import or the ethanol folly.

      Tariffs are a negative-sum game if only because they confer benefit based on lobbying rather than productivity. In contrast, the end-of-year tax bill raised government debt to gush money back to businesses, but only if they contrive to make a profit, whereas the unemployment “insurance” that Nancy Pelosi called the most efficient way to inject funds into the economy is disbursed only if one continued to complain of a bad back.

      This is not exactly “posturing” but ticking off a box of one more campaign promise kept. I didn’t want it any more than a Mexico-funded border wall, but both were part of the coalition that denied Her Nibs the White House. Trump will keep the campaign promise, and then promptly trade it in for something somewhere else that he can portray as a victory.

      Already he has gotten the nightly news cycle unstuck from Gun Control.

      • Hey, I’m OK with ‘all tariffs are bad’ as well as ‘all subsidies are bad’. I don’t think featherbedding domestic producers by either method is desirable. But maybe, just maybe, sometimes it’s necessary. Like with a strategic product. Arms. Or steel and alumin(i)um. But if you have to have either tariff or subsidy they should be limited in time.

        The money going round thing is only to scale the damage in this particular case to people’s wealth. And it’s not much, so squealing about that harm is not the best argument.

  3. Your theory being that China will always be there to make our aluminum and steel for us.

    As their navy postures in the South China Sea.

    Your economics is correct. But there is more to the world than economics.