The easy way to understand whether someone groks trade or not is to see what they suggest when someone throws rocks in their own harbour. If they then insist that we’ve got to make our own lives worse by tossing boulders into our harbour then they’re all three of an idiot, a protectionist and a mercantilist. Jean Claude Juncker and the European Union more generally qualify for those three epithets therefore.
The European Union is threatening to target some of America’s most iconic brands if Donald Trump follows through on his threat to impose swingeing tariffs on imports of steel and aluminium.
Levi’s jeans, Harley-Davidson motorbikes and bourbon could all receive tit-for-tat duty hikes, according to Jean-Claude Juncker, the European Commission president.
Donald Trump makes Americans poorer by idiot tariffs on steel and aluminium, the EU response is to make Europeans poorer by idiot tariffs on Levi’s, bikes and booze. This is idiocy.
A very useful reminder that the EU simply is not a free trade project, it’s a zollverein instead. Free trade within the bloc but with strong barriers to trade with the rest of the world. This isn’t how we usually hear it of course. The Remoaners are those shouting that the EU is all about free trade – but that’s only within it. With the rest of the world, that might not be carrying the huge social costs, we of course must have barriers.
But, you know:
“If the Americans impose tariffs on steel and aluminium, then we must treat American products the same way,” Juncker told German television stations.
“We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans,” he said. “I’m not saying we have to shoot back, but we must take action.
“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levi’s,” he added.
The reason we don’t like tariffs is because they make the population behind them poorer. The aim and point is to make steel and aluminium more expensive in the US. So, the retaliation must, just must, make Harley’s, jeans and booze more expensive in Europe. So, we’re going to say “Trump, you’re making Americans poorer! To hit back, we’ll make Europeans poorer!”
As we say, this is idiocy. Or, that Joan Robinson line about harbours and rocks. People who understand trade do not argue in this manner, only protectionists and mercantilists do. That the EU is so arguing shows they’re not about free trade.
As is pointed out, we all used to know this:
I have been watching the second season of Victoria on PBS (quite good, I think) and much of it has covered the famines of the 1840’s and the debate over the Corn Laws. At the time, it seems that average people understood that the British tariffs on imported food were in place solely to protect the agricultural profits of aristocratic (and by definition well-connected) landowners while hurting the country as a whole by raising food prices for every consumer and contributing to the famines that were sweeping Ireland and parts of England.
That is why Cobden won and the Corn Laws were repealed. Because the bulk of the population understood the issue. It’s also, and not by chance, the repeal which coincided with the rise of the standard of living of the working man after the Industrial Revolution. Instead of all the money going to landlords it went to the peeps, a good thing too.
Everything that the EU – and the Remoaners – says about trade is proven wrong in this reaction here. They are indeed making the protectionist, mercantilist, argument, that because the American government is stupid enough to make Americans poorer then the European one must make Europeans poorer in response.
At which point, bugger ’em, eh?