US To Impose Tariffs on Canada, Mexico, and China on Feb. 1 and Tyranny on America
The US will impose 25 percent tariffs on Mexico and Canada, and 10 percent on China, the Trump White House said. The purpose of tariffs is to protect domestic manufacturers and their work forces. What American manufacturers and workers are being protected by Trump’s tariffs? So much of US manufacturing is located offshore, what purpose are the tariffs serving?
The “tariffs” in reality are taxes imposed on imports of foreign produced goods, including the offshored production of US corporations of goods and services sold in the US. If the tariffs are paid by the consumer rather than by the US corporations that offshore their production for the American market, the effect will be to reduce the quantity demanded because of the higher price. How much this harms the offshore producers depends on whether their products are price elastic or inelastic. Some are one and some are the other.
This approach to bringing offshored US jobs back to America is incorrect. It demonstrates the economic ignorance of Trump and his advisors. Consider, for example, if US auto assembly relies on parts made in Canada, a 25% rise in parts cost could shutdown auto assembly and result in US unemployment. As best as I can tell, few auto parts are any longer produced in the US, so there is no industry to protect or to supply the parts that tariffs keep out. Before you can protect industries, you first must have them.
Instead of tariffs, the income tax should be used. US Corporations that produce domestically using American labor–not H-1B and L-1 imported labor– should have a lower tax rate. US corporations that produce abroad with foreign labor goods and services sold in the US should have a higher tax rate. The tax rate should be high e
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
