Essentially, after years of criticizing China and much of Europe for the way they handle imports and exports, these officials want to copy them.
.. This could lead to slightly higher prices in the United States for everything from Chilean grapes to iPhones to gasoline. But it could also provide a boost to companies and workers who make things in the United States and sell them abroad... The World Trade Organization, the global trade adjudicator, has allowed developing countries to impose far higher tariffs than industrialized countries, while they build up industries at home. China has been counted as a developing country... China and other countries, but not the United States, also charge a steep value-added tax, which is a kind of national sales tax on imports and home-produced goods alike. Exports are exempt from value-added taxes... Once value-added taxes and sales taxes are included in an international comparison, America’s taxes on imports are much lower than those of almost every other country.
When Presidents Defy Economic Gravity, Gravity Usually Wins
Donald Trump is going to learn what his predecessors did: strong-arming a job revival is easier said than done
In fact, it’s become 10% cheaperto manufacture in Mexico thanks to the plunge in the peso that followed his election.
.. when Mr. Obama imposed tariffs on Chinese tires in 2009: Chinese imports plummeted while other countries’ jumped. The action saved at most 1,200 jobs, a study by the Peterson Institute for International Economics found, at a cost to consumers of $900,000 per job because of higher prices.
.. The gas furnaces Carrier builds in Indianapolis are a low-tech product in which the U.S. has no comparative advantage, in contrast to the sophisticated aircraft engines that Carrier’s affiliate, Pratt & Whitney, builds in Connecticut for which it plans to add 8,000 jobs in coming years.
.. “I was born at night but it wasn’t last night,” Chief Executive Greg Hayes told CNBCMonday. When United Technologies bids for its next Pentagon contract, wouldn’t it want last week’s deal weigh in its favor? And if a competing bidder has outsourced jobs, wouldn’t United Technologies want that to count against it?
.. Virtually every business that locates in Puerto Rico gets its own tax break, with the result that the effective corporate tax rate is a pitiful 5%
.. If Mr. Trump really wants to boost manufacturing employment he would figure out how to train workers to fill some of the 334,000 manufacturing jobs that are now vacant. If he doesn’t have the patience for that, he should just raise tariffs across the board. It would hurt consumers and could start a trade war, but at least they’d be transparent.
Will Donald Trump be Herbert Hoover all over again?
Hoover took over in a time of general prosperity but stagnant wages and vast income inequality. Populists in Congress proposed dramatic increases in tariffs to help the struggling agricultural sector, the equivalent of today’s beleaguered blue-collar workers.
.. The proposal divided Republicans in Congress and Hoover before they produced the 1930 Smoot-Hawley Tariff Act, setting off retaliation, freezing international trade, contributing to the Great Depression and accelerating a ruinous cycle of nationalism around the world.
Hoover’s ghost should haunt the GOP right now. A populist, protectionist president has come to power at a time of long-depressed wages and vast inequality. He threatens to implement a 45 percent tariff against China and 35 percent against Mexico, and he’s about to collide with free-traders and pro-business interests in his own party.
If they jettison Trump’s agenda and proceed with business as usual, they risk inflaming Trump’s already furious followers. If they do what Trump has promised, there will be chaos as they pursue what amounts to a mission impossible: enacting a huge tax cut, making enormous spending increases on infrastructure and the military and cutting the debt in half — all without touching Social Security and Medicare.
And they’ll be without a mutual foil to unite them.
.. Giuliani said prosecuting Clinton would be “a presidential decision” — an extraordinary departure from the American tradition of removing the president from prosecutorial decisions, particularly since President Nixon tried to block the Justice Department’s Watergate probe in 1973.
.. Trump surrogate Omarosa Manigault told a conservative website that Trump is keeping an enemies list.
Could the U.S. Really Gut Its Trade Deals?
Trump and others vow to pull out of the TPP and beef up tariffs, but that wouldn’t stop companies from continuing to move jobs to where labor is cheapest.
the U.S. doesn’t have a bilateral trade agreement with Vietnam, but companies still make things there and sell them here. They do that because the standard-of-living is lower in developing countries, and workers are willing to work for lower wages.
.. The tariffs on textiles are actually among the highest that still exist, Chad P. Bown, a senior fellow at the Peterson Institute of International Economics, told me. But companies still make clothing and shoes overseas because it requires a lot of labor to do so, and labor is much cheaper outside the United States.
.. The average tariff rates in the United States have declined from 18.4 percent in 1934 to 1.3 percent in 2007
.. as trade experts like Daniel Drezner have pointed out, the U.S. manufacturing sector isn’t exactly in need of a revival: Output has actually grown since 1990. But technology has made the sector more productive, so even as factories produce more, they need fewer people. Economists have calculated that 80 percent of the loss of manufacturing jobs in the U.S. is due to technological progress, while just 20 percent is due to trade