Tariffs

I got it! Now, I understand—or think so—what tariffs, a tax on imports, is all about. I use the analogy of a canal (w/locks) vs. a damn. Isolationism is a “damn,” a way of saying we don’t want all your imports or we want to limit your goods from coming into our country. This is protectionism, of which our President is accused—not without reason.The canal idea is a system to raise and lower the level of prices/wages to match those another country maintains with which we trade. No tariff should mean that the product being traded (purchased) should have to be equal, or near equal, in value to the same product produced locally (or the product should be something only imported and not made locally). This also assumes the exchange rate on both currencies is 1, the same. This is highly, highly unlikely. (let me say, impossible).

So we need the canal, the tariff? Maybe and maybe not.The market is not like it was in the early 1800’s when for example the South sold cotton to England and the North bought the finished product in cloth goods. To keep the canal analogy, the cotton gin used in harvesting the crop would be made in France, say, and the main wheel of the device came from Belgium. And the actual gin was assembled in the South. (You get the point).

No product today is made completely in any one country to be sold to another country that also made the same product. In fact, many American workers, work for foreign companies within the U.S.A. (which is the same for other countries). Your 401K probably has an emerging markets fund with investments overseas. To eliminate tariffs completely suggests that the standard of living, unionized benefits, wages, and the exchange rate of the various countries’ currencies (to name but a few factors) are on par with each other’s. (Obviously with nations run by differing types of governments—not all are free enterprise democracies—these factors will vary.)

The liberal ideology promotes the simplest solution: one world as one country. Obviously, it would promote a socialism not a nationalism. A nation’s identity as a “nation” is a distinction—not a commonality—incorrectly viewed by the far left as fascism. A border wall becomes a not-welcome sign rather than a boundary identifying a country’s span and sphere of government and law.

But can nationalism flourish in a global market? We do not have tariffs between states in the U.S.A. Was that not what nation building was all about under President Bush—to bring democracy and free enterprise to the world? Is that not what the euro has been all about—one currency between countries in the union? (There is no tariff between France and Germany.) Is it possible to set the American dollar as the world’s trading currency—one world currency?

China has an exchange rate of the Yuan vs the dollar that today, 6/25/2018 was .15 (15 cents) to the Yuan which makes Chinese goods sell here much cheaper regardless of tariffs!

I am not smart enough to see the solution here.  Perhaps, Star Trek had it right.  The Federation of Planets didn’t use money any more and there was no poverty any longer.  Was Gene Roddenberry’s T.V. vision a barter system or just have one world government produce the replicator distributed globally, no cost.  His vision was no damn or canal but a global flood. And how do we make this happen!?


I was just thinking:  The U.S.A. is a nation of immigrants, in its origins, and many, if not most, Americans still have family scattered throughout the world.  Some even send money “home” on a regular basis.  It might be difficult for many to say “America First” without a caveat that reflects their concerns overseas. Is a “strong” nationalism a detriment to these concerns and extended interests?  Or can a nationalism correctly applied make America more resourceful economically—to help us to help them, those family members not privileged to be here in a wealthy democracy?

Print Friendly, PDF & Email