From publications like The Wall Street Journal, you might conclude that tariffs as an economics practice is in the same category as piracy, slavery and child labor, but worse.
Glenn: as a bio/chem major, I'd never (intelligently) discuss any economic theories. But, I do recall that after WWII, we rebuilt the Japanese and German industries. The Japanese actually used American ideas/theories when they restarted their factories. No millions of VPs in their auto industries: engineers working alongside line workers. They rebuilt their steel industry as well, and, in the 1950s we kept hearing of Japanese "junk." In reality, I was told that their steel was WAY better than ours was by the 1970s. Bethlehem Steel, native to a lot of PA, had not been able to invest in R&D due to ridiculous union demands. When the Lebanon, PA plant closed its doors, the more senior workers were getting up to 18 weeks of vacation annually. That means you needed 4 workers to do the work of 3! While the US and England and a few other European nations made really decent audio gear, Japan surpassed anything we had at the less expensive end of the range. (Although I still think British loudspeakers and American subwooferrs are the vey best!)
Again, I don't know squat about tariffs, but I was taught about the way the Japanese rebuilt their nation. Biden was more insane than usual when he prevented the Nippon purchase!
It's generally recognized that Biden nixed the Nippon purchase at the behest of union bosses. Even the union workers favored it, but the union bosses opposed it because it threatened their cushy jobs running the union.
And that makes perfect sense! Honda and Toyota have plants here in America, and pay their workers well---so much so that the workers oppose the UAW. (At least they did in the past.)
One of my neighbors used to laugh about his steel working job, back it the 1970s. He quit laughing when his son couldn't get a job in his plant because the union had too many laid-off members to accept new laborers.
Allow me to add my personal experience to your observation. I was born in 1950 in Bethlehem, PA, and lived there through the latter days of Bethlehem Steel's existence. My father worked there his entire adult life, and knew first hand what the problem was, viz., greed. Greedy workers and their greedy union bosses demanded ever more pay and benefits, including that 18 week vacation. Greedy company executives gave them what they wanted, believing that the vast resources of the corporation guaranteed their ability to do so while simultaneously guaranteeing the continued viability of the company. Ultimately, much like the famous Thatcher quote, they ran out of other people's money. The story of Bethlehem Steel is, in microcosm (if one can use that to describe a billion dollar entity) the story of America in the twentieth century; from riches to rags. I personally witnessed the situation while working there periodically for three years. My father wisely counseled me to look eslewhere for a career because by the time I reached his age (mid-forties) there would no longer be a "Bethlehem Steel." It took a bit longer, but his prediction was eventually proven accurate. Both my father and Bethlehem Steel are long gone. I miss them both.
Steve: sorry for both your losses. My ideas were from other folks in our area of Lebanon and Steelton, PA. You lived these happenings. Steelton had 3 blast furnaces and a Bessemer converter, and when we moved to the west side of the Susquehanna, you could sit out and see the red glow. As you said, all gone!
When you say "things China imports from us" since I grew up in farming/livestock country I immediately think pork and wheat. There are other ag commodities as well, I am sure.
China loves its pork dishes (so do I) and we have the capability to raise all the pork they want to buy, at our price. If they want to punish their consumers that's not my problem. Sane with wheat.
I know that China raises a lot of its own pork, but they apparently are more limited in where it can be raised and how much they can raise.
We aren't even close to using all our pork producing capacity.
Great piece, Glenn. Trump(meaning the wonderful Bob Lighthizer) imposed tariffs on steel and aluminum - vital strategic materials here - and the prices went down.
Why do we impose 20% taxes on everything you buy(passed through) in America rather on importers to the greatest market in the world? Communism, Woodrow Wilson and his gang of racists.
We taxed importers for the first 140 years of our existence and our country grew very wonderfully with all tides organically rising, now the government is in control with the oligarchs.
What I love about the current tariff debate is how all of a sudden, Democrats have become massive supply-siders just because of Orange-Man-Bad. The people who usually argue that corporations are not taxed enough are now scared that those same corporations will be passing on the cost of tariffs to consumers!
I just wish Trump would now come out and declare "climate change" an existential crisis, that we need to spend trillions of dollars on boondoggles, and reinstate the draft to raise an army to make China and India stop emitting CO2. All so that Democrats will admit that it's all a scam.
If anyone can pull of the "threat" of tariffs, It's Trump. I wish him the greatest success in bluffing all other world leaders...
Glenn: as a bio/chem major, I'd never (intelligently) discuss any economic theories. But, I do recall that after WWII, we rebuilt the Japanese and German industries. The Japanese actually used American ideas/theories when they restarted their factories. No millions of VPs in their auto industries: engineers working alongside line workers. They rebuilt their steel industry as well, and, in the 1950s we kept hearing of Japanese "junk." In reality, I was told that their steel was WAY better than ours was by the 1970s. Bethlehem Steel, native to a lot of PA, had not been able to invest in R&D due to ridiculous union demands. When the Lebanon, PA plant closed its doors, the more senior workers were getting up to 18 weeks of vacation annually. That means you needed 4 workers to do the work of 3! While the US and England and a few other European nations made really decent audio gear, Japan surpassed anything we had at the less expensive end of the range. (Although I still think British loudspeakers and American subwooferrs are the vey best!)
Again, I don't know squat about tariffs, but I was taught about the way the Japanese rebuilt their nation. Biden was more insane than usual when he prevented the Nippon purchase!
It's generally recognized that Biden nixed the Nippon purchase at the behest of union bosses. Even the union workers favored it, but the union bosses opposed it because it threatened their cushy jobs running the union.
And that makes perfect sense! Honda and Toyota have plants here in America, and pay their workers well---so much so that the workers oppose the UAW. (At least they did in the past.)
One of my neighbors used to laugh about his steel working job, back it the 1970s. He quit laughing when his son couldn't get a job in his plant because the union had too many laid-off members to accept new laborers.
Allow me to add my personal experience to your observation. I was born in 1950 in Bethlehem, PA, and lived there through the latter days of Bethlehem Steel's existence. My father worked there his entire adult life, and knew first hand what the problem was, viz., greed. Greedy workers and their greedy union bosses demanded ever more pay and benefits, including that 18 week vacation. Greedy company executives gave them what they wanted, believing that the vast resources of the corporation guaranteed their ability to do so while simultaneously guaranteeing the continued viability of the company. Ultimately, much like the famous Thatcher quote, they ran out of other people's money. The story of Bethlehem Steel is, in microcosm (if one can use that to describe a billion dollar entity) the story of America in the twentieth century; from riches to rags. I personally witnessed the situation while working there periodically for three years. My father wisely counseled me to look eslewhere for a career because by the time I reached his age (mid-forties) there would no longer be a "Bethlehem Steel." It took a bit longer, but his prediction was eventually proven accurate. Both my father and Bethlehem Steel are long gone. I miss them both.
Steve: sorry for both your losses. My ideas were from other folks in our area of Lebanon and Steelton, PA. You lived these happenings. Steelton had 3 blast furnaces and a Bessemer converter, and when we moved to the west side of the Susquehanna, you could sit out and see the red glow. As you said, all gone!
When you say "things China imports from us" since I grew up in farming/livestock country I immediately think pork and wheat. There are other ag commodities as well, I am sure.
China loves its pork dishes (so do I) and we have the capability to raise all the pork they want to buy, at our price. If they want to punish their consumers that's not my problem. Sane with wheat.
I know that China raises a lot of its own pork, but they apparently are more limited in where it can be raised and how much they can raise.
We aren't even close to using all our pork producing capacity.
Great piece, Glenn. Trump(meaning the wonderful Bob Lighthizer) imposed tariffs on steel and aluminum - vital strategic materials here - and the prices went down.
Why do we impose 20% taxes on everything you buy(passed through) in America rather on importers to the greatest market in the world? Communism, Woodrow Wilson and his gang of racists.
We taxed importers for the first 140 years of our existence and our country grew very wonderfully with all tides organically rising, now the government is in control with the oligarchs.
A tariff, like any other tax, is a policy tool. Used wisely, it can achieve a useful goal. I think Trump understands that.
Let's throw one more factor into the mix:
Not everything is dollars or donuts.
For example, if you have to buy oil with dollars, but you have Euros, then you have to trade Euros into dollars first.
So, whenever the price of a barrel of oil goes up like 10%, the exchange between dollars and Euros gets pressure to adjust the dollar down 10%.
Free market or manipulation?
Quien sabe?
Likewise, when dealing with an unfree market like China, as steel tariffs go up 25% then the exchange rate compensates.
What I love about the current tariff debate is how all of a sudden, Democrats have become massive supply-siders just because of Orange-Man-Bad. The people who usually argue that corporations are not taxed enough are now scared that those same corporations will be passing on the cost of tariffs to consumers!
It’s going to be a fun 4 years.
"Orange Man Bad" produces some odd bedfellows, eh?
I just wish Trump would now come out and declare "climate change" an existential crisis, that we need to spend trillions of dollars on boondoggles, and reinstate the draft to raise an army to make China and India stop emitting CO2. All so that Democrats will admit that it's all a scam.