Thought experiment to show why protectionism damages the economy

[Swordsmyth]

??? lol

More of that swordy Orwellian doublespeak. You just spent this whole thread arguing that they need to get MORE involved in managing the economy.

Trade is not the domestic economy, try to learn to read.
We need to deregulate and lower taxes at home and keep foreigners from meddling in our economy.

[CCTelander]

Trade is not the domestic economy, try to learn to read.
We need to deregulate and lower taxes at home and keep foreigners from meddling in our economy.

You need to try to learn to reason.

Protectionist tariffs ARE taxes. It’s just that protectionists have deluded themselves into believing that they’re a magical kind of tax that, unlike regular taxes, brings security and prosperity and doesn’t do any real harm.

Nothing could be farther from the truth.

Protectionist trade policies destroy many more jobs in unprotected industries than the preserve in “protected” ones, they cost consumers tens of billions of dollars a year, they enfeeble “protected” industries rendering them less capable of competing in the open market and even cause a significant number of needless untimely deaths.

Plus, they’re immoral as hell, using force and coercion to infringe upon the rights of innocent people merely seeking to spend their own money asvthey see fit.

Protectionism has no place in a free society.

[Swordsmyth]

You need to try to learn to reason.

Protectionist tariffs ARE taxes. It’s just that protectionists have deluded themselves into believing that they’re a magical kind of tax that, unlike regular taxes, brings security and prosperity and doesn’t do any real harm.

Nothing could be farther from the truth.

Protectionist trade policies destroy many more jobs in unprotected industries than the preserve in “protected” ones, they cost consumers tens of billions of dollars a year, they enfeeble “protected” industries rendering them less capable of competing in the open market and even cause a significant number of needless untimely deaths.

Plus, they’re immoral as hell, using force and coercion to infringe upon the rights of innocent people merely seeking to spend their own money asvthey see fit.

Protectionism has no place in a free society.

You are completely wrong, I have always said that tariffs are taxes.
They just happen to be the best kind of taxes, they do the least damage to the domestic economy and are the easiest to avoid, and then they have beneficial effects of promoting independence and domestic productive capacity.

Protectionism in no way destroys unprotected industries, especially when you want tariffs on everything that can be produced in the country as I do.
And Free Trade destroys far more industries, the historical record is clear.

They are not immoral in the least, they preserve liberty and independence while being less harmful than other taxes to fund the legitimate functions of government.
What is immoral is trading with the enemies of our nation and liberty who practice slave labor and destroy the environment.

Free societies do not exist with Free Trade, the common man is reduced to serfdom and states are merged into centralized and unaccountable governments like the EU.

[acptulsa]

What is immoral is trading with the enemies of our nation and liberty who practice slave labor and destroy the environment.

Careful. RFKJr casually mentioned the environment and you accused him of being in full lockstep with the carbon zero loonies. Now that you cynically set that precedent, the same thing could happen to you.

[CCTelander]

You are completely wrong, I have always said that tariffs are taxes.
They just happen to be the best kind of taxes, they do the least damage to the domestic economy and are the easiest to avoid, and then they have beneficial effects of promoting independence and domestic productive capacity.

Protectionism in no way destroys unprotected industries, especially when you want tariffs on everything that can be produced in the country as I do.
And Free Trade destroys far more industries, the historical record is clear.

They are not immoral in the least, they preserve liberty and independence while being less harmful than other taxes to fund the legitimate functions of government.
What is immoral is trading with the enemies of our nation and liberty who practice slave labor and destroy the environment.

Free societies do not exist with Free Trade, the common man is reduced to serfdom and states are merged into centralized and unaccountable governments like the EU.

Tariffs on everything produced within the country? I see, prosperity through massive taxation.

SMGDH

[acptulsa]

Tariffs on everything produced within the country? I see, prosperity through massive taxation.

SMGDH

Don't be silly. He was very careful to exclude tariffs on things the U. S. doesn't produce at all. So clearly he isn't just anxious to raise revenue for use in liberal-style behavior modification or importing military age males.

[CCTelander]

Don't be silly. He was very careful to exclude tariffs on things the U. S. doesn't produce at all. So clearly he isn't just anxious to raise revenue for use in liberal-style behavior modification or importing military age males.

Historically, trade wars, which his preferred policies are certain to ignite, have a strong tendency to lead to the “importation” of large quantities of military age males. They often come accompanied by tanks, aircraft and various and sundry other interesting items.

[CCTelander]

Protectionists will no doubt ignore these facts, but I provide them for anyone who may actually be open to hearing something resembling the truth about the practice of protectionist trade policy. It hurts those it claims to “protect.” Just like all government actions, it accomplishes exactly the opposite of what it purports to do, and that is probably deliberate.

Protectionism Ruined U.S. Steel
Another round of federal intervention to prevent its sale makes no sense.

ERIC BOEHM | 1.2.2024 1:45 PM

Few people, and even fewer senators, would blink an eye at the news that the 690th most valuable company in the United States was being sold.

Unless, as is the case, that company happened to be named "U.S. Steel."

In response to last month's news that U.S. Steel would be purchased by Japan-based Nippon Steel, a bipartisan group of senators—including Sherrod Brown (D–Ohio), John Fetterman (D–Penn.), Josh Hawley (R–Mo.), Marco Rubio (R–Fla.), and J.D. Vance (R–Ohio)—have condemned the decision. The three Republicans have gone a step further by formally asking the Biden administration to block the deal because it represents a supposed threat to national security. As a political matter, the reactions to the sale of U.S. Steel have served as a nice reminder that the impulse to intervene in the private affairs of publicly traded companies runs across both major parties.

As a matter of economic policy, however, those senators have completely missed the point. More government intervention is not going to save U.S. Steel. Indeed, decades of protectionist policies seem to have contributed to its downfall.

"Arguably, US Steel has been a disappointment since the day it was formed," writes Brian Potter, a senior infrastructure fellow at the Institute for Progress, in his Construction Physics Substack newsletter. "The company's large size made it unwieldy to manage, and it was late to every major advance in steelmaking technology of the last 100 years, from continuous rolling to the basic oxygen furnace to the minimill….As far as I can tell, no major steelmaking technology over the last century came out of US Steel."

Though U.S. Steel enjoyed global dominance in the aftermath of World War II, in no small part because the war had wrecked large portions of Europe's and Japan's industrial bases, it was already on the decline by the 1960s and early 1970s. After Nippon—the company now poised to buy out what remains of U.S. Steel—surpassed it as the world's largest steel company in 1971, U.S. Steel responded "not by trying to improve their operations, but by demanding government protection from 'unfair' foreign trade practices," writes Potter.

Thus began a 50-plus-year effort by the federal government to prop up U.S. Steel. Those interventions have taken many forms, including "hundreds of import restrictions; tens of billions of dollars in state, local and federal subsidies and bailouts; exemptions from environmental regulations; special 'Buy American' rules just for integrated steelmakers like U.S. Steel; and federal pension benefit guarantees," wrote Scott Lincicome, vice president of the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, in a 2021 rundown on how protectionism had failed American steel companies and their employees. Even before President Donald Trump slapped 25 percent tariffs on nearly all imported steel, about half of all anti-dumping tariffs imposed by the federal government were aimed at various types of foreign-made steel, according to Lincicome.

What has all that government aid done for U.S. Steel? Today, the company makes about one-third as much steel as it did in the mid-1950s and employs about 10 percent as many people as it did during its heyday. U.S. Steel was dropped from the S&P 500 in 2014 and ranked as the 690th most valuable company based in the United States before the Nippon purchase was announced. As Potter notes, that means U.S. Steel ranks behind the Texas Roadhouse steakhouse restaurant chain and employs around the same number of people as Chewy, the online pet care delivery service.

Would the sale of either of those companies attract the attention of senators or be condemned as a risk to American national security? Of course not.

The difference between Texas Roadhouse and U.S. Steel mostly comes down to branding and lobbying.

"One of the smartest things the founders of U.S. Steel did was put 'U.S.' in the firm's name," suggests Dominic Pino in a post at National Review. While it is certainly not the only example out there, the branding of U.S. Steel (a fully private company, don't forget) "makes it sound like it's a bad thing for America if it's purchased by a company from another country," Pino concludes.

As for lobbying, it is no secret that U.S. Steel has long maintained a powerful presence in Washington. That goes all the way back to the company's more successful early days, when it used its sheer size in the market "to bully other steelmakers and extract money from consumers," writes Potter. "When this stopped working, it used its political influence to prevent consumers from buying low-cost foreign steel. Improving the efficiency of its operations was something it did as a last resort when left with no other options."

Like people, companies get better at the things they work to improve on. Long ago, U.S. Steel decided that it didn't need to innovate to compete more successfully in a global marketplace if it could instead extract benefits from the political process. Ironically, that same political process could now be the thing that prevents U.S. Steel from being acquired by a more successful firm.

The idea that national security is threatened by Nippon's purchase of U.S. Steel is utterly silly. And the associated idea that the federal government has failed to adequately cradle American steelmakers from foreign competition is simply false. Protectionism failed U.S. Steel by cushioning the company when it needed to innovate, and another round of federal intervention to prevent its sale makes no sense.

https://reason.com/2024/01/02/protec...ned-u-s-steel/


The truth is that the US steel industry has enjoyed protectionist trade policies quite literally from the day the doors opened on the first US based steel mill.This has resulted not in a strong, robust industry ready to step up in times of national emergency, but in a weak indolent, incompetent industry that has failed repeatedly to become more efficient or innovative in any way and, when faced with the consequences of its own incompetence and laziness immediately runs to the government for yet more "protection."

The facts are right out in the open for all to see.

[Swordsmyth]

Tariffs on everything produced within the country? I see, prosperity through massive taxation.

SMGDH

It's not massive taxation.
Rates have not even been discussed, and tariffs are easy to avoid, don't buy imports and you don't pay tariffs.

[Swordsmyth]

Historically, trade wars, which his preferred policies are certain to ignite, have a strong tendency to lead to the “importation” of large quantities of military age males. They often come accompanied by tanks, aircraft and various and sundry other interesting items.

Only when nations were dependent on the trade involved.
Free Trade is more likely to cause wars than independent countries.
Unless what you are actually advocating for is world government, which is what Free Trade creates.

[Swordsmyth]

Protectionists will no doubt ignore these facts, but I provide them for anyone who may actually be open to hearing something resembling the truth about the practice of protectionist trade policy. It hurts those it claims to “protect.” Just like all government actions, it accomplishes exactly the opposite of what it purports to do, and that is probably deliberate.




https://reason.com/2024/01/02/protec...ned-u-s-steel/


The truth is that the US steel industry has enjoyed protectionist trade policies quite literally from the day the doors opened on the first US based steel mill.This has resulted not in a strong, robust industry ready to step up in times of national emergency, but in a weak indolent, incompetent industry that has failed repeatedly to become more efficient or innovative in any way and, when faced with the consequences of its own incompetence and laziness immediately runs to the government for yet more "protection."

The facts are right out in the open for all to see.

Bunk.
Domestic regulation and taxation combined with free trade are to blame.
We used to have lots of domestic competition until the big government and free trade destroyed it all.
The only way to fix it is to adopt protectionism for all related industries and reduce domestic regulations and taxation.

[Swordsmyth]

Careful. RFKJr casually mentioned the environment and you accused him of being in full lockstep with the carbon zero loonies. Now that you cynically set that precedent, the same thing could happen to you.

LOL

No comparison.
He didn't casually mention anything, he full throatedly and repeatedly endorsed all the climate garbage and locking people up for opposing it.
I buy as much as I can from domestic sources and sources that are less evil than China.

Your desperation is palpable.

[acptulsa]

LOL

No comparison.
He didn't casually mention anything, he full throatedly and repeatedly endorsed all the climate garbage and locking people up for opposing it.
I buy as much as I can from domestic sources and sources that are less evil than China.

Your desperation is palpable.

You're the one dogmatically repeating a lie that was already debunked, like Zippy used to do.

[CCTelander]

Bunk.
Domestic regulation and taxation combined with free trade are to blame.
We used to have lots of domestic competition until the big government and free trade destroyed it all.
The only way to fix it is to adopt protectionism for all related industries and reduce domestic regulations and taxation.

Facts just don’t faze you at all, do they? You just keep posting the same bland, unsupported assertions and go along your merry way. What, are you just copying and pasting that drivel?

Anyway, as usual most of what you say is in error, although I certainly do agree that taxes and regulations need to go.

[Madison320]

You're the one dogmatically repeating a lie that was already debunked, like Zippy used to do.

I've been saying for years that he's the "Zippy on the Right".

[Swordsmyth]

You're the one dogmatically repeating a lie that was already debunked, like Zippy used to do.

Gaslighting does nothing for you.

[Swordsmyth]

Facts just don’t faze you at all, do they? You just keep posting the same bland, unsupported assertions and go along your merry way. What, are you just copying and pasting that drivel?

Anyway, as usual most of what you say is in error, although I certainly do agree that taxes and regulations need to go.

Projection by you and the rest of the Free Trade cult.

[CCTelander]

Projection by you and the rest of the Free Trade cult.

Get over yourself.

[Swordsmyth]

Get over yourself.

That's what followers of the failed Free Trade cult need to do.
Nothing in the world or the nation has improved since Free Trade started being pursued, everything has gotten worse.
But you guys cling to an outdated theory while ignoring practical results and the gaping holes in the theory that people point out.

[CCTelander]

That's what followers of the failed Free Trade cult need to do.
Nothing in the world or the nation has improved since Free Trade started being pursued, everything has gotten worse.
But you guys cling to an outdated theory while ignoring practical results and the gaping holes in the theory that people point out.

It's hilarious watching you react to anything that resembles freedom like a vampire reacts to sunlight.

And now it seems that YOU’RE the one projecting, accusing advocates of actual freedom of doing exactly what protectionists have been doing. Typical.

[acptulsa]

Gaslighting does nothing for you.

But you refuse to stop trying to do it to me.

What was that working definition of insanity, again..?

[CCTelander]

But you refuse to stop trying to do it to me.

What was that working definition of insanity, again..?

"You must spread some Reputation around before giving it to acptulsa again."


I don't think he's insane. Just very, very stubborn! Like a dog with a bone he just won't give up his preconceived notions and recognize the reality that they are in error.

[CCTelander]

Here's one by a guy a few people around here might recognize:

The Case for Free Trade
09/01/1981, Free Market, Ron Paul


In 1981 the Federal Register published a declaration from President Reagan: "I determine that it is in the national interest for the Export-Import Bank of the United States to extend a credit in the amount of $120.7 million to the Socialist Republic of Romania (for) the purchase of two nuclear steam turbine generators."

This loan carried an interest rate of 7¾% for ten years, but the first payment wasn't due until July, 1989.

Not too long before this announcement, the administration had made public its "voluntary" restraints on the number of cars Japan can export to the United States.

These two items—subsidization of trade and its restriction—are all too typical of our present trade policy.

Although we think of ourselves as a free-trading nation, it takes more than 700 pages just to list all the tariffs on imported goods, and another 400 to inventory all the non-tariff restraints, such as quotas and "orderly marketing agreements." [In other words, we were not then, are not now and really never have been a truly "free trading nation. CCT]

A tariff is a tax levied on a foreign good, to help a special interest at the expense of American consumers.

A trade restraint or marketing agreement—on the number of inexpensive Taiwanese sneakers that Americans can buy, for example—achieves the same goal, at the same cost, in a less forthright manner.

And all the trends are towards more subsidies for U.S. exporters, and more prohibitions and taxes on imports.

Trade is to be subsidized or restrained, not left to the voluntary actions of consumers and producers.

In 1930, Congress passed the Smoot-Hawley tariff bill, imposing heavy tariffs on imports, with the avowed motive of "protecting" U.S. companies and jobs. Within one year, our 25 major trading partners had retaliated with their own tariffs on American goods. World trade declined sharply, and the depression was made world-wide and longer-lasting.

Today the policy of protectionism is again gaining favor in Congress, and in other countries. But it must be fought with all our strength.

Not only does protectionism make everyone poorer—except certain special interests—but it also increases international tensions, and can lead to war.

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it," wrote Adam Smith in 1776, "better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. The general industry of the country will not therefore be diminished... but only left to find out the way in which it can be employed to the greater advantage."

An important economic principle is called the division of labor. It states that economic efficiency, and therefore growth, is enhanced by everyone doing what he does best.

If I had to grow my own food, make my own clothes, build my own house, and teach my own children, our family's living standard would plummet to a subsistence, or below-subsistence, level.

But if I practice medicine, and allow others with more talent as farmers, builders or tailors to do what they do best, we are all better oft: Precious capital and labor are directed to the areas of most productivity, and through voluntary trading, we all benefit.

This principle works just as effectively on a national and world-wide scale, as Adam Smith pointed out.

It may be that Japan can make cars more efficiently than Detroit, at least certain kinds of cars, and that the capital and labor in parts of the u.S. auto industry could be better employed in other areas. With quotas, however, we will never find out We will only increase the price of those Japanese cars that do get through, and of U.S. cars as well, since competitive pressures will be taken off General Motors and Ford.

Free trade at all levels makes for more prosperity, as the Founding Fathers knew. That's why they gave Congress power to remove barriers to interstate commerce.

During the period of the Confederation—after our independence but before the adoption of the Constitution—some of the states erected tariff barriers against imports from their neighbors. The resulting economic stagnation and antagonism threatened the unity of our country, and led to the adoption of the interstate commerce clause by the Constitutional convention. The removal of all trade barriers—and not meddling in the economy—was the purpose of the clause.

As a result, we, as Americans, are free to trade with all other Americans, so that resources are put to their most efficient use in our giant domestic market This happy consequence is no small contributor to our wealth.

Without this Constitutional prohibition, state legislatures would listen to lobbyists for special interests, and enact protection against "unfair" out-of-state competition.

Knowing how similar situations come about, we could bet that someone in Minnesota, with idle greenhouses, would lobby the state legislature, pointing out that farmers in Florida, California, and Texas have too easy a time growing oranges. To protect Minnesota farmers, and create jobs, they would call for a heavy tax on out-of-state citrus, so greenhouse growing of oranges would become economic in Minneapolis.

As a result, oranges would drastically increase in price, and the quality would be lower. Minnesotans who like orange juice would be able to afford less, and what they could get would not be as good. But some would reap windfall profits, at the expense of the consumer. And pressure in orange-growing states would grow to retaliate against Minnesota products, to the detriment of everyone in the country. And we could bet that interstate antagonisms would increase as well. International trade barriers work no differently.

But because our Constitution forbids such domestic barriers, a company in Laredo, Texas, can trade freely, easily, and profitably with a firm in Oregon, thousands of miles away. (It's important to remember that both parties to a non-coerced, non-fraudulent trade benefit from the exchange, or hope to benefit, or the exchange would not take place.)

But let that Laredo firm seek to trade with a Mexican company only a mile away, and tremendous impediments spring up, thanks to government regulations on both sides. "The motive of all these regulations," wrote Adam Smith, "is to extend our own manufactures, not by their own improvements, but by putting an end, as much as possible, to the troublesome competition of such disagreeable rivals."

No one worries about the balance of trade between Oregon and Texas. That between Mexico and Texas should be of no consequence either. It is a problem only to government planners.

Dr. Murray Rothbard, who lives in New York City, has said that he's delighted the federal government doesn't keep interborough trade statistics. "We'd have the Bronx and Brooklyn worried about balance of trade!"

"Nations," notes Dr. Rothbard, "may be important politically and culturally, but economically they appear only as a consequence of government intervention."

But doesn't protection save U.S. jobs? Yes, it can save the jobs of some, but it costs jobs overall, and harms consumers.

Limiting Japanese car imports, for example, does protect the. jobs of high-seniority members of the United Auto Workers, who earn twice the average U.S. industrial wage. But it takes away any incentive to correct government-caused productivity problems.

But diverting resources into uneconomic uses takes them away from other, more productive, areas and costs jobs. Some jobs are lost; others are never created. The uneconomic effects of protectionism benefit a few- usually well-to-do—at the expense of the great majority, including the poor.

Protectionism cannot be justified on economic or moral grounds. As Frederic Bastiat wrote, tariffs are "legalized plunder." The law is used to steal.

By what right does the U.S. government tell an American citizen he cannot buy a foreign product? Such action is reprehensible on every ground imaginable, and is totally incompatible with individual freedom. Also inexcusable on any ground is the vast network of U.S. trade subsidies.

The taxpayers subsidize companies through the Export-Import Bank, the Department of Commerce, and the Overseas Private Investment Corporation, to name only three.

Such programs contribute to inflation, high taxes, "crowding out" in the capital markets, higher prices, and misallocation of resources.

Exports are only useful economically when they are profitable. Otherwise they represent a net loss.

But don't we need our own subsidies because other countries have theirs? If the government of France wishes to help impoverish their own citizens to send us cheap products, why should we impoverish ours as well? We can, and should, oppose those policies for France as well as the United States, but we have no right to take away buying opportunities from our own consumers.

Notes the Council for a Competitive Economy: we should consider what would happen if a foreign country decided to give us free cars, TVs, steel, and other products. Would this hurt the American people? To ask the question is to answer it.

Every economic intervention in trade, domestic or foreign, should be abolished, for practical and moral reasons.

Even if other countries maintain tariffs or subsidies, we would be helped, not hurt, by unilaterally ending ours.

We would improve our productivity, shift resources to those areas where we 'have an advantage, grow more prosperous, and make a greater variety of less-expensive goods available to our people.

And we would serve the cause of peace and set a good example for the world to emulate.

"When people and goods cross borders," Ludwig von Mises used to quote, "armies do not." Free and extensive trade, unsubsidized, between the peoples of the Earth lowers tensions and makes us all better off It is, morally and economically, the only proper policy.

https://mises.org/free-market/case-free-trade

[Swordsmyth]

Here's one by a guy a few people around here might recognize:




https://mises.org/free-market/case-free-trade

Domestic interstate trade is not relevant.
All the states share the Constitution and similar bodies of law along with shared culture and not too drastically different economic levels.
And it still would be preferable to have more domestic competition by having interstate tariffs at some fraction of federal tariffs on international trade, it would help to eliminate other taxes that are much more destructive to liberty as well, such as income and property taxes.
We do not control other countries and most of them (especially those best able to undermine our industries) are hostile to us and to liberty to one degree or another.

This is one of those topics where Ron drank the Kool-aid and is flat wrong.
Appeal to authority will do nothing for you when all logic and history prove you wrong.

[Swordsmyth]

"You must spread some Reputation around before giving it to acptulsa again."


I don't think he's insane. Just very, very stubborn! Like a dog with a bone he just won't give up his preconceived notions and recognize the reality that they are in error.

Physician, heal thyself.
I'm the one whose position has radically changed due to studying the issue.

[CCTelander]

Domestic interstate trade is not relevant.
All the states share the Constitution and similar bodies of law along with shared culture and not too drastically different economic levels.
And it still would be preferable to have more domestic competition by having interstate tariffs at some fraction of federal tariffs on international trade, it would help to eliminate other taxes that are much more destructive to liberty as well, such as income and property taxes.
We do not control other countries and most of them (especially those best able to undermine our industries) are hostile to us and to liberty to one degree or another.

This is one of those topics where Ron drank the Kool-aid and is flat wrong.
Appeal to authority will do nothing for you when all logic and history prove you wrong.

Sadly, for you anyway, “all logic and history” do not prove me, or Ron, wrong. They do quite the reverse actually.

But hey, you do you.

[CCTelander]

Physician, heal thyself.
I'm the one whose position has radically changed due to studying the issue.

Oh! You’re THAT ONE!

Sadly for you, once again, I too have radically changed my position on this over the years, based upon actual evidence though. You see, back in the 1960s, 70s, and 80s I was an America Firster and believed vehemently in protectionism. Only once I started actually studying a little about the topic of economics, and also finally realized how morally reprehensible protectionism actually is, did I actually embrace free trade.

You should refrain from making those kinds of assumptions about people. You would look less foolish if you did.

[acptulsa]

And it still would be preferable to have more domestic competition by having interstate tariffs at some fraction of federal tariffs...

You think the country would look better with customs inspections at every state line?

Why do you always go for Maximum Totalitarianism? And why do you spend every morning hanging around libertarians and yelling at us for not marching in lockstep with your bold new ideas for destroying liberty?

[CCTelander]

Another good, short read on the topic.

The Immorality of Protectionism
12/01/2023 • Mises Wire • Ryan McMaken

The 2024 campaign is underway, and that means new efforts by politicians to pander to economic nationalists and protectionists by calling for new trade wars and trade controls. This will surely happen even though the Biden Administration has done very little to reverse the protectionist policies that Donald Trump imposed during his term.[That'a because socialists, communists and the like just LOVE protectionist trade policies. They're not about to change them. CCT] For example, new so-called "Section 301" tariffs, which have been in place since 2018, are still in effect and are only now being "reviewed." In response to a possible change to these new trade barriers, a bipartisan group of legislators has already called on Biden to keep these taxes in place. Moreover, candidate Trump, now campaigning for 2024 has recently called for an additional 10-percent tariff (i.e., tax) on all imports.

Politicians who support these taxes and regulations like to frame it all like it's some kind of public service to the community. These arguments generally employ some sort of feel-good language like "tariffs level the playing field for Americans workers."

In reality, of course, calls to raise or maintain tariffs are nothing more than a call to raise taxes on Americans. Describing these taxes as a burden only for foreign workers or foreign importers requires either dishonesty or impressive levels of ignorance about how trade barriers work.

In practice, tariffs mean Americans are forced to pay higher taxes on goods when those goods are obtained from a foreign country. [Americans also pay more for domestically produceed goods for reasons that have been discussed ad nauseam. CCT] Or, in some cases, Americans are banned altogether from purchasing certain foreign goods. Moreover, tariffs are only the most straightforward way of taxing Americans for goods that come from abroad. There are also countless non-tariff barriers including a wide variety of regulatory restrictions that mandate foreign goods conform to environmental and labor mandates. "Rule of origin" restrictions require mountains of paperwork tracing the origins of various raw materials used in the manufacture of goods that may later be exported to the US. The idea here is that if, say, foreign goods imported from low-tariff Country A are created with "too many" raw materials from the high-tariff Country B, then Americans must pay a higher tax rate.

In all this, potential American importers who don't follow all these rules with excruciating attention to detail are open to prosecution, imprisonment, confiscation of goods, and the imposition of heavy fines by American bureaucrats. Many protectionists may delude themselves into thinking the tax police who oversee foreign trade only target foreign parties, but that is utterly untrue. The only way to be reasonably sure of avoiding prosecution, of course, is to spend money and countless man hours on compliance officers, attorneys, and consultants to help navigate the labyrinth of federal regs. If mistakes are made in this process, then one is likely to hear from the Feds that "ignorance of law is no excuse. Enjoy federal prison."

Protectionism means Americans who are already taxed and regulated to the skies via income, sales, and property taxes must endure additional levels of taxation and regulation to get their hands on foreign goods. All these additional costs and taxes imposed at the import stage naturally filter down to the entrepreneurs, small business owners, and ordinary people who benefit from access to less expensive foreign goods. For many small and medium-sized businesses especially, additional costs imposed on imports can mean the difference between a viable enterprise and a bankrupt one.

Bizarrely, protectionists often act like they have the moral high ground—as if calling for higher taxes and more power for the government bureaucracy were some kind of great service to the working man. Protectionists like to cloak their calls for higher taxes in the mantle of "America first" or as striking a blow against the latest foreign bogeyman. In reality, protectionism is nothing more than old fashioned interest group politics. Protectionists want higher taxes and more government control in order to gain an advantage for some very specific sliver of the American public. Often, the people who benefit are wasteful and expensive American workers and managers who cannot compete in an international market. Their efforts would better be employed in some enterprise where they can compete. Yet, protectionists want to protect this group at the expense of other groups, such as hard-working middle class business owners who rely on access to foreign goods to provide products and services. In this respect, protectionists are no better than any run-of-the-mill Progressive who wants more taxes on one group in order to subsidize some other group. Even worse, protectionist laws only mean anything if they are enforced. In other words, protectionists' demonstrated preference is for policies that impose prison sentences and fines on peaceful Americans whose only "crime" may be attempting to buy and sell goods without the proper government paperwork.

There's no moral high ground here for the protectionists, just unfounded self-righteousness. Of course, if protectionists don't want foreign goods in their country, they are welcome to avoid purchasing such goods. Protectionists are also welcome to try to convince other people to not purchase those goods. One could also advocate against domestic regulations that drive up the cost of domestic production. A good start would be abolition of minimum wages, laws that favor labor unions, and countless costly environmental regulations. On the other hand, it's a lot easier to politically harness fear of foreigners and foreign competition. This fear is easily weaponized as a way to trick people into signing off on yet another tax increase or spate of government regulations.

htthttps://mises.org/mises-wire/immo...tectionismp://

[Swordsmyth]

You think the country would look better with customs inspections at every state line?

Why do you always go for Maximum Totalitarianism? And why do you spend every morning hanging around libertarians and yelling at us for not marching in lockstep with your bold new ideas for destroying liberty?

Much better off with more competition and less centralized mega corporations, and also with state tariffs instead of income taxes that force everyone to let the government know everything about their finances and property taxes that make government the landlord and everyone else peasant tenants who pay rents and own nothing.

You have no idea how to secure as much liberty as possible.