Wednesday, May 15, 2019

Trump's Tariffs: Why Such a Half-Baked Policy?

The problem with Trump is an incapacity to act to any effect. He hasn't even built the goddam wall, or stopped the flood of illegal immigrants by other means.

Now Trump is imposing tariffs on China to punish China for stealing American industrial and military secrets, which obviously, won't stop China stealing American industrial and military secrets.

Why not?

Because the US is in an informational, technological and economic war with China for global supremacy. China ain't gonna give up just because Trump bans Huiwei phone gear, or sticks a tariff on imports of Chinese-made Christmas tree lights.

The only consequence of Trump's anti-China tariffs, if they stay, is to force global corporations in search of cheap labor, to move off-shore production from China to Bangladesh, Vietnam or a dozen other places. Meantime, the Chinese will have more Christmas tree lights for their own consumption. So who cares? What difference does it make?

If Trump actually wanted to rebuild America's industrial base, he should impose a tariff wall against every one, with the exception of Canada, Mexico, and the rest of Latin America: the condition being, of course, that those countries free to export to America tariff-free enter the same tariff ring-fence as America.

That way, US labor would be competing not with billions of low wage workers, but a manageable 400 million Latin Americans. Moreover, those Latin American competitors would have an incentive to purchase high-tech gear tariff-free from the US, rather than China or elsewhere beyond the tariff ring fence. A further benefit would be to raise the prosperity of Latin America, thereby reducing the inclination of millions of Latin Americans to migrate to North America.

Two other requirements for a sound US industrial policy are:

1. Anti-monopoly legislation that creates fierce competition within the protected Western Hemisphere market;

2. Negotiation with other high wage countries, including Japan, S. Korea, Australia, and the European nations, to bring them within the tariff protected trade zone.

None of this will get done, obviously. Instead, it looks as though we may be about to see the Mother-of-all wars for global hegemony against Iran.

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