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Tariffs: The Taxes That Made America Great
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As his limo carried him to work at the White House Monday, Larry Kudlow could not have been pleased with the headline in The Washington Post: “Kudlow Contradicts Trump on Tariffs.”

The story began: “National Economic Council Director Lawrence Kudlow acknowledged Sunday that American consumers end up paying for the administration’s tariffs on Chinese imports, contradicting President Trump’s repeated inaccurate claim that the Chinese foot the bill.”

A free trade evangelical, Kudlow had conceded on Fox News that consumers pay the tariffs on products made abroad that they purchase here in the U.S. Yet that is by no means the whole story.

A tariff may be described as a sales or consumption tax the consumer pays, but tariffs are also a discretionary and an optional tax.

If you choose not to purchase Chinese goods and instead buy comparable goods made in other nations or the USA, then you do not pay the tariff.

China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China’s economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom.

Tariffs were the taxes that made America great. They were the taxes relied upon by the first and greatest of our early statesmen, before the coming of the globalists Woodrow Wilson and FDR.

Tariffs, to protect manufacturers and jobs, were the Republican Party’s path to power and prosperity in the 19th and 20th centuries, before the rise of the Rockefeller Eastern liberal establishment and its embrace of the British-bred heresy of unfettered free trade.

The Tariff Act of 1789 was enacted with the declared purpose, “the encouragement and protection of manufactures.” It was the second act passed by the first Congress led by Speaker James Madison. It was crafted by Alexander Hamilton and signed by President Washington.

After the War of 1812, President Madison, backed by Henry Clay and John Calhoun and ex-Presidents Jefferson and Adams, enacted the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming U.S. market. It worked.

Tariffs financed Mr. Lincoln’s War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley, who said that a foreign manufacturer “has no right or claim to equality with our own. … He pays no taxes. He performs no civil duties.”

That is economic patriotism, putting America and Americans first.

The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson’s income taxes, igniting that most dynamic of decades — the Roaring ’20s.

That the Smoot-Hawley Tariff caused the Depression of the 1930s is a New Deal myth in which America’s schoolchildren have been indoctrinated for decades.

The Depression began with the crash of the stock market in 1929, nine months before Smoot-Hawley became law. The real villain: The Federal Reserve, which failed to replenish that third of the money supply that had been wiped out by thousands of bank failures.

Milton Friedman taught us that.

A tariff is a tax, but its purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.

The principle involved in a tariff is the same as that used by U.S. colleges and universities that charge foreign students higher tuition than their American counterparts.

What patriot would consign the economic independence of his country to the “invisible hand” of Adam Smith in a system crafted by intellectuals whose allegiance is to an ideology, not a people?

What great nation did free traders ever build?

Free trade is the policy of fading and failing powers, past their prime. In the half-century following passage of the Corn Laws, the British showed the folly of free trade.

They began the second half of the 19th century with an economy twice that of the USA and ended it with an economy half of ours, and equaled by a Germany, which had, under Bismarck, adopted what was known as the American System.

Of the nations that have risen to economic preeminence in recent centuries — the British before 1850, the United States between 1789 and 1914, post-war Japan, China in recent decades — how many did so through free trade? None. All practiced economic nationalism.

The problem for President Trump?

ORDER IT NOW

Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately, the loss of its national identity.

Brexit was the strangled cry of a British people that had lost its independence and desperately wanted it back.

Patrick J. Buchanan is the author of “Nixon’s White House Wars: The Battles That Made and Broke a President and Divided America Forever.”

Copyright 2019 Creators.com.

 
• Category: Economics, History • Tags: China, Donald Trump, Free Trade 
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  1. It’s too bad that Mr. Trump’s justified increased tariffs on made-in-China goods is being undone by his reckless policies of bullying the world to bow down to the American Empire. Bolton and Pompeo obviously are itching to start a war against Iran (at the behest of Netanyahu), and Trump, the so-called America-first Nationalist, is doing nothing to stop them. Given Washington’s inexorable march to yet more imperial wars of conquest, I’m rooting for China.

    • Replies: @Harold Smith
  2. Is this site working?

  3. he Tariff Act of 1789 was enacted with the declared purpose, “the encouragement and protection of manufactures.” It was the second act passed by the first Congress led by Speaker James Madison. It was crafted by Alexander Hamilton and signed by President Washington.

    Alexander Hamilton, the all-singing all-dancing founder of Wall street, in favour of tariffs ?
    Shurely shome mishtake there ?

  4. “A tariff is a tax, but its purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.”

    On the contrary, “its purpose” depends on the actual reason why it is being imposed, right?

    Is orange clown doing this as part of a good-faith effort to “make America great again” – for the ultimate benefit of Joe and Jill Sixpack – or is orange clown doing it in an effort to “contain” China and show China who’s boss – for the sake of his handlers’ agenda?

    • Replies: @Parisian Guy
  5. @follyofwar

    “Bolton and Pompeo obviously are itching to start a war against Iran (at the behest of Netanyahu), and Trump, the so-called America-first Nationalist, is doing nothing to stop them.”

    Why would orange clown want to stop the people he appointed from doing exactly the things he appointed them to do?

    (BTW in the warped “mind” of the devil-worshiping demon-possessed orange clown, sacrificing America for the sake of the jewish-supremacist agenda is probably the greatest thing that could happen to America; it’s an honor).

    • Replies: @Realist
  6. nsa says:

    Buchanan might think differently if his livelihood depended on the sourcing of electronic components for the creation of a “made in america” product. Take electronic components…..there are no domestic manufacturers……zero, zilch, none. Electronic manufacturing of components suitable for consumer products left these shores many years ago, never to return. For example, the lowly quarter watt carbon film resistor. A 5000 piece tape and reel can be had for U$D40……that’s 0.8 cents per resistor. Of course, they come out of China and the quality is quite good, with a defect rate so low it is not measurable. Note this is not a matter of labor rates, as the production of resistors is fully automated. The actual problem is that americans are too fucking lazy and stupid to figure out how to make a reel of lowly resistors for a price point. If made domestically, chances are resisstors would cost a buck each and wouldn’t meet a reliability spec. Trumpstein claims the tariffs are paid by the Chinese manufacturer which betrays the mindset of an eighth grader. His boy, Kudlow the Joo, knows exactly who pays the tariff and doesn’t care.
    So Buchanan willfully avoids the actual reason for this trade war……the Chinese rejection of the foreign “financial services” industry i.e. the Joos. Joos like to make money without working for it……they don’t build something, repair something, grow something. Joos prefer to get a slice of everyone else’s action……insurance, middle man, broker, mutual fund, agent, venture capital, etc. The Chinese witnessed the Joo takeover of the former USSR and want no part of it. This is the actual basis of the present trade war. And the Chinese certainly don’t want the IMF parachuting in the likes of Jeffie Sachs to install a modern financial infrastructure and tax system i.e. Joo takeover. It’s that simple, Pat.

    • Replies: @Parisian Guy
    , @Svigor
  7. bluedog says:

    Good ole Pat and his flag waving, but the fact is I was reading this morning that as far as the tariffs hurting China that they only amount to a little over a half of a percent of China’s GDP.Now from what I read the EU is China’s largest trading partner and then Asia and the BRI ,add in the fact that China has raised 400 million out of poverty and many into the middle class they can now look to internal consumption to keep their growth growing, while we stagnate and go deeper in debt..!!

  8. @Harold Smith

    You’re right.
    If the tariff purported to get manufacturing back again in USA, the tariff would have been enacted on any good coming from low wage and/or low regulation country.

    As it is now, it could only remove some manufacturing from China, and increase it in Vietnam, Thailand, Bangla Desh, Mexico and the like.

  9. @nsa

    Being the world champion of quality/cost ratio for quater watt resistor is definitely less sexy than doing $billions when producing nothing, or producing all kind of sci-fi objects.

  10. Let me leave aside the 2 issues already being discussed here, trade relations with China and the economic effect/point of tariffs for just a second. Mr. Buchanan alluded to, but did not really write in a nutshell the following point:

    Tariffs were the American Federal Government’s MAIN SOURCE OF INCOME, for a century or more. To me if you’re gonna have ANY taxes, which even as a hard-core Libertarian, I will admit you need, that’s seems like BY FAR the best tax one could have for the benefit of the American people.

    The income tax that has come to replace all that money (AND MORE!!) is about the worst – between invasion of privacy, use of tax law to make economic adjustments to the nation, tremendous compliance costs, and just the FREAKIN’ MONEY and indignity of it all, I can’t think of a nastier tax. Property taxes come in 2nd, mainly because lately the control of the money so obtained is very much out of the hands of the people who pay. It also mean one NEVER really owns his house and land (try not paying tax for a few years and see how long you will stay there). Sales tax is somewhat more reasonable and punishes excessive consumption. (I might like that, but you might not.) It also puts burdens on business, especially small business, as usual.

    If we could cut the budget by 90%, via slashing the warfare AND the welfare state, then all money required could come from tariffs again… a man can dream, can’t he?

    VERY NICE ARTICLE, MR. BUCHANAN!

    • Agree: Chris Mallory
    • Replies: @Reg Cæsar
  11. @bluedog

    Mr. Bluedog, I know you are one of Godfree’s Comm-in-tards, and hate America completely, so I don’t see why you have any problem then. The tariffs won’t hurt China? OK, fine with me too; I’m not a warmonger. They won’t keep us from stagnating, you say? You ought to appreciate that. What the hell is your problem with tariffs then, China-butt-boy?

    I personally think that, keeping Mr. NSA’s very good point on manufacturing in mind, it can’t but help America get at least some of it’s manufacturing infrastructure back. No, there won’t be the jobs of the 1970’s, as indeed automation is the key. There are plenty of very bright American real engineers (I’m subtracting out the geeks that say they’re engineers AND the Chinese big-boobed, sexy-cyborg, LED-solderers that somehow think it’s their “engineering skills” that garner them great attention.*)

    There’d be more Americans graduating engineering school if some decent jobs were available, setting up, managing, and improving the mostly automated manufacturing of the future.

    .

    * See also, Peak Stupidity’s “You know I read it in a magazeye-eee-eee-een…”

    • Replies: @bluedog
  12. Svigor says:
    @nsa

    Note this is not a matter of labor rates, as the production of resistors is fully automated. The actual problem is that americans are too fucking lazy and stupid to figure out how to make a reel of lowly resistors for a price point.

    Citation needed. P.S., implication that labor rates are the only difference between China and US manufacturing environments suggests stupidity.

    • Replies: @map
  13. map says:

    The cause of the Great Depression was not the Federal Reserve and the Smoot-Hawley line of reasoning is a misunderstanding of Jude Wanniski, the guy who created the idea that the SHT caused the Depression.

    The stock market in 1929 was reacting to the effect that it knew the Smoot-Hawley tariff would have on the international credit structure.

    Before WWI, America was the world’s biggest debtor nation. During and after WWI, it became the world’s biggest creditor, essentially lending enormous amounts of money around the world. Essentially, the US was financing the mercantilist policies of foreign countries, to the point where Belgian cement could be sold in the United States at lower cost than making it in Pennsylvania and Michigan, the cement belt of the United States, even after shipping costs. In fact, one provision of the Ford-McCumbry tariff is that it could only be removed with proof that the importer actually had lower and more efficient manufacturing costs.

    The Great Depression was essentially caused by the US’s status as the world’s biggest creditor, creating a perfect storm of political fallout. The international debt exposure collided with the need to service those debts by acquiring US currency, currency that could only be had by selling something to the United States. This led to massive dumping that undercut US farming and manufacturing prices, leading to massive political support for tariffs. By 1929, America had a $103 billion economy, the biggest in the world, with almost $40 billion in loans that it gave out to the rest of the world, with global prices declining so rapidly that it was putting American companies out of business.

    There was no way that the US could maintain the international credit structure and then cut-off imports through tariffs without causing a massive bond default. The stock market understood this, which led to the selloff in 1929 when the Smoot-Hawley tariff was finally passed. The selloff became even more rapid when the bond market detonated.

    The Federal Reserve’s job was to maintain the gold standard at $20.67/oz, so that the US would have stable prices. The excessive liquidity created by the market selloff was sopped-up by the Fed removing that liquidity from the US system. The Fed had nothing to do with the collapse of 1929 and, in fact, would have made things worse by getting off the gold standard in an attempt to re-inflate, which is why Milton Friedman is wrong about the underlying cause of the Great Depression. To make matters worse, Hoover panicked and raised taxes to 63% which crashed the market even more.

    Roosevelt had a decent fix for the problem, seizing gold, inflating the currency to re-capitalize the credit market, and then fixing the inflation to a new gold standard at $35/oz. The problem was that he did not cut taxes, so the excessive liquidity was never put to use by the private sector, instead being used by the NRA. This was a huge mistake. The tax cuts from Hoover’s 63% back down to 25% would have sopped-up the excessive liquidity and rapidly got us out of the Great Depression.

    But the underlying cause was America being the world’s biggest bank, undermining domestic industry, and then trying to fix it with tariffs.

    • Replies: @Curmudgeon
  14. Tariffs are no benefit to the American people as long as capitalists can import all the foreign labour they want.

    • Agree: Old Prude, anon19
    • Replies: @follyofwar
    , @Reg Cæsar
  15. The Republicans from 1861 on supported high tariffs because it guaranteed them the internal market and kept wages down, while they were active in importing foreign labour for the same purpose. It can be argued with strong evidence that tariffs were not responsible for U.S. prosperity and growth, but rather counter-productive. Their primary purpose was to divert wealth to the capitalist class.

    • Replies: @Twodees Partain
  16. huisache says:

    Tariffs financed Mr. Lincoln’s war

    Right, another reason to hate them—-he was taxing to protect the industrialists who proceeded to rob the country blind while he gave away the west to the railroads who were his clients leading up to his war.

    • Replies: @Twodees Partain
  17. map says:

    Kudlow does not know what he is talking about.

    Pay for the tariff?

    Really?

    All this time companies could have raised prices by 25% or more yet they have refrained from doing so because…why? They did not like to have more profit?

    The reality is that it is not easy to raise prices and not affect demand. In fact, the whole reason why tariffs are criticized is because it forces companies to eat gross margin if they want to continue selling at a competitive price. To believe otherwise you would have think that the global supply chain’s purpose is to pass the savings of labor and regulatory arbitrage onto you.

    • Replies: @Harold Smith
  18. map says:
    @Svigor

    The point is that these resistors are made there because the Chinese government subsidized their manufacture there and excluded any attempt to import them from other countries.

    • Replies: @Parisian Guy
    , @animalogic
  19. Incitatus says:

    “As his limo carried him to work at the White House Monday, Larry Kudlow could not have been pleased with the headline in The Washington Post: ‘Kudlow Contradicts Trump on Tariffs.’”

    Stopped seriously reading when Buchanan wrote “limo”. Ancien Régime revisited. Images of Nixonian WH guard plastic helmets come to mind.

    Head-shrinker slogans? “Economic patriotism”, “putting America and Americans first”, “path to power and prosperity”, “economic nationalism”. Who can disagree? Buchanan shamelessly offers such in defense of the clueless “king of debt”, four+ times bankrupt.

    Mentioning Adam Smith to justify Stormy Daniels’ partner?

    Priceless!

  20. Yee says:

    Well, it not 1789 anymore.

    The author doesn’t seem to understand that manufacturing now has a global supply chain, highly concentrated in 3 regions of the world – North America, West Europe and East Asia. No country makes their products from raw materials to end products, everything is breakdown to hundreds or even thousands of parts made by different suppliers internationally. And the US and Europe take the most profitable links in this chain.

    Of course you can try to rebuild China’s share in this chain elsewhere to cut us off. However, it’s a low profit share, and it still require capital, engineers, skilled workers, power plants, roads and ports etc. to run it. It also take 3 decades to build it.

    Are you sure those who have the capital want to put their money into that? Perhaps it time for the US to set up state corporations?

  21. @map

    “All this time companies could have raised prices by 25% or more yet they have refrained from doing so because…why? They did not like to have more profit?

    The reality is that it is not easy to raise prices and not affect demand.”

    Yes it’s easy to raise prices and that’s exactly what sellers did. Look at the price of Chinese machine tools for example. I bought a lathe in back January a few days too late and I paid $500 more for the lathe than it sold for the previous week, because of orange clown’s tariffs.

    In many cases, e.g. low-end machine tools, Chinese products are the only game in town, so the “demand” was hardly affected and the tariff is basically a sales tax.

    • Replies: @nsa
  22. Tariffs were the motivating force for your Mr. Lincoln’s civil war, you ignorant clown.

    • Agree: animalogic
  23. @clyde wilson

    True, tariffs were used by the whigs in the same manner before Lincoln’s republican revolution. The republicans simply expanded upon the whig practice of promoting mercantilist advancement of the new American royalty.

  24. nsa says:
    @Harold Smith

    Adding insult to injury, Trumpstein took the $500 extracted from you and gave it to whining mendicant multi millionaire soybean farmers…….the folks owning 3000 acre spreads in the midwest valued at $7k to $10k per acre and already heavily subsidized by price supports and land in the soil bank and low interest ag loans. All of this nonsense could have been avoided by simply insisting the yuan be allowed to float and seek its market level i.e. strengthen against the U$D. Everything else would then sort itself out. However, as described in a previous comment, the actual goal of the tariffs is to force 1.3 billion Chinese to accept the American financial services sector into their domestic economy i.e. a Joo takeover. Gullible Americans may think Joo domination of finance, media, and government is a good idea…..but the Chinese aren’t that stupid.

    • Agree: Realist
  25. @map

    Reference needed.

    Are you working in electronics?

    Do you know that most resistor producer are japanese, korean, european or american corporations. The like of Philips, Samsung, panasonic, rohms, vishay, Stackpole Electronics

    Why would have chinese given subsidies to these corporations?

    • Replies: @Wally
  26. anonymous[340] • Disclaimer says:

    Paul Craig Roberts’ latest column here faults the offshoring of jobs and proposes to correct the problem with different tax rates based on geographic origin of the goods. My comment is offered to enable further discussion among the rest of you.

    • Replies: @Achmed E. Newman
  27. @anonymous

    Too bad P.C. Roberts got his feelings hurt by those like myself who called him out on his stupidity regarding Global Climate Disruption(TM) a year or more back. He doesn’t allow comments now.

    (He’s a great Libertarian otherwise.)

    • Replies: @David
  28. Realist says:
    @Harold Smith

    Why would orange clown want to stop the people he appointed from doing exactly the things he appointed them to do?

    Exactly orange clown is a member of Deep State. This bull shit that he is against hegemony and war or wants to stop illegal immigration for that matter, is a charade….it’s a game of good cop/bad cop. Of course the fact that American IQ is what it is, it works perfectly.

  29. Pat, do “wars for Israel”-tariffs make the United States “great”?

    They’re expensive and involuntary – citizens should be able to vote directly on whether they feel like footing the bill for another Iraq II.

  30. @clyde wilson

    Neither are SANCTIONS. Just wait until the US/Israel-instigated war against Iran really ramps up (it has already started). Putting aside all the other manifest problems this war will cause, how will Americans feel about filling up their gas-guzzling monster SUV’s with $10/gallon gas?

  31. Paul says:

    “Free trade” has deindustrialized much of the American Midwest. However, it tends to be promoted by countries that have become economically dominant in the world and not wanting competition from developing countries that are instructed not to be protectionist (“kicking away the ladder” it has been called).

  32. David says:
    @Achmed E. Newman

    PCR is not a libertarian. He once said his property rights were usurped by a neighbor who built a house between PCR’s house and a lake, blocking PCR’s pretty view. But he never mentioned what compensation his neighbor became entitled to when PCR built a house that precluded his neighbor’s right to build a house on his own land.

    PCR is not a deep thinker, either.

    • Replies: @Achmed E. Newman
  33. @map

    Ah yes, the inanimate stock market understood everything.
    Clearly you fall for the “free market” line of bullshit. The markets are and were manipulated. A trial run for the US was in Wiemar Germany where the “market” decided, all by itself, that there should be hyper-inflation, which caused the sell-off of large swathes of German industry for a few cents on the dollar.
    The Dow “drops” 500 points in a day. Do you even comprehend how much stock needs to be sold in order to accomplish that? I was a trustee on a pension fund with assets over $6 billion. Pension plans 10 times bigger were not big enough to “move” the market for a drop like that. Can you grasp that even if every day trader and sole investor, in the US, owned the same stock and sold all of what they owned of that stock, it wouldn’t move the market? The system is rigged.

    • Replies: @map
  34. map says:
    @Curmudgeon

    No.

    The Weimar government decided that there should be hyper-inflation and the government decided that the US should becoming the world’s biggest creditor and the government decided to subsidize foreign industries and to impose tariffs.

    Government failures abound everywhere.

    A huge bond-market dislocation will most certainly force astute investors to sell-off their holdings.

    What is your point?

    • Replies: @animalogic
  35. bluedog says:
    @Achmed E. Newman

    What an asshole with your rambling and name calling,makes one wonder why they even let people like you anywhere near a keyboard with your feel good mentality.!!

    • Replies: @Achmed E. Newman
  36. Except for the chronology that leaves out America’s manufacturing heyday—when we had our biggest widespread middle class (1945 — 1965)—this article is clarifying. The key issue is the connection between domestic economic production and national independence.

    There was an upside in ceding our economic independence through an imbalance of tariffs: a cost savings on goods manufactured abroad. The advantage was minuscule compared to the price uphike on major household expenses, such as housing and cars. The cost of essentials has gone through-the-roof in the debt-based asset-bubble economy that replaced the manufacturing economy.

    When rent consumes more than half of an individual’s pay, s/he often loses independence, hence the proliferation of adult mom’s basement dwellers. But non-independent citizens who can’t finance an independent household on their wages often have the minor consolation of a little extra cash for nonessentials. They can buy a cup of designer coffee and a few more pairs of designer jeans (or designer yoga pants).

    When a nation trades access to jobs that cover the cost of major household expenses, like rent, for access to more or cheaper nonessentials, it loses long-term strength. Americans traded economic independence for a reduction in the price of things like toasters, clothing, toys, furniture and (some) electronics. We traded our independence cheaply, valuing vanity-related things that can be budgeted better over independence-defining items that take huge chunks of pay like housing.

    The outlet mall culture began in the Eighties when I was in junior high, but there were still a lot of factories in the USA at that point. The big difference was that nonessentials cost more, meaning that is was easier to assess someone’s economic status based on things like designer clothing. Yes, there were a few rich people, with massively successful businesses or in the highest-paying professions, but overall, Americans were much more equal in the areas that matter most to economic independence like housing.

    There was a downside. Every Eighties kid remembers the stressful importance of having the trendy tennis shoes, the designer jeans and a high enough quantity of knit shirts with a small alligator decal. The outlets started cropping up, but those things were expensive then. Brutal as the designer-goods social hierarchy was, kids were not shooting each other in schools back then. Of course, with more available household-supporting jobs, far fewer of them were daycare-raised.

    Maybe, there was more social order in a situation where the important things in life, like independent housing, were attainable, with the less important things that you can budget put in their proper place. You can always drive a less expensive car. You can skip the trendy jeans, or you can buy just a few expensive clothing items, learning to choose carefully—to prioritize. Your kids will appreciate their toys more when they aren’t awash in Barbies and plastic cars. While some people can afford more vanity items, you can afford independent housing if you work hard and budget.

    Not so in today’s part-time / temp / churn-job economy, with its top 20% of salaried dual-earner parents living the Antoinette lifestyle, even though they are often frequently vacationing in their family-friendly / absenteeism-friendly jobs, rather than working hard or risking money to start businesses. And low-wage workers, NannyCams or retired-in-name-only grandparents do the work of raising their kids.

    Then we have our welfare-assisted single-breadwinner households, our single moms and womb-productive legal / illegal immigrants who are able to work for less pay due to major household bills footed by big government if they stay under the income limits for monthly welfare programs and refundable child tax credits that top out at $6,431. They do this by working part time or in temp jobs, ditching the welfare in months when earned income exceeds the programs’ limits.

    This rigged setup has stripped the labor market of household-supporting jobs for non-welfare-eligible citizens, but it ensures cheap servants for the top 20%, propping up America’s weak, crappy service sector economy at the expense of an independent American economy and generations of Americans with independent households.

    One big difference in the Eighties was our Asian competitor. It was Japan, a country that placed big tariffs on our products. But the Japanese put jobs here in the USA, probably at the expense of their own citizens’ abilty to establish independent households. Now, our competitor is China, and it is a double whammy of imbalanced tariffs that favor China along with China’s absorption of millions of factory jobs in US-owned corporations, not that the shifting of jobs is China’s fault.

    It is the fault of America’s America Last business titans and America’s bought-off, globalist-neoliberal political class. “Robber Barons” that actually gave a lot back to the USA they are not. James Madison and George Washington they are not. John Adams, Thomas Jefferson and Alexander Hamilton they are not. They’re no William McKinley, either.

    They’re for old number one.

  37. nsa says:

    If you know something, the PTBs knew it many years ago. The US PTBs know there are 700 million Chinese middle class consumers and another 700 million Chinese consumers on the way……and are not going to gratuitously kiss off this vast market. The PTBs (joo intelligentsia and their useful goy idiots like Trumpstein) know they will never be able to compete in the highly automated consumer products market….the US workforce is too drug addled and lacks the work ethic. So what is left? You got it…..financial services. You can fit billions of dollars worth of mortgages, insurance, mutual funds, IPOs in a desk drawer with no need for the laborings of the low skill MAGAstinians. That is the purpose of this trade war……to gain access to the domestic Chinese financial services market where US companies can compete i.e. let the joo boys in to loot and pillage just like in the good ole USA. Of course, the Chinese are not that stupid as they have already dealt with large numbers of joo middlemen and know what to expect. What next…..a full scale nuclear exchange with China?
    It is repetitive, but the whole problem could have been solved by simply insisting on a floating yuan i.e. a market based exchange rate. The yuan would have organically strengthened against the U$D with trade imbalances gradually sorting themselves out. Of course, the PTBs know this but have other geopolitical goals in mind.

    • Replies: @animalogic
  38. nomores says:

    No, it’s the fault of our Israel-first, bought-and-paid-for Oval Office that Americans have to bear the big bills of special interests.

    Trump betrayed his “base” – as he always intended.

  39. not one person in this thread, or anyone ever as far as i can tell, can explain why other nations tariffs are always ok, but US tariffs are never ok. i haven’t seen this explained, or even brought up as a topic, in a single economics or finance magazine, one time ever. the economist, the wall street journal, and so forth, have absolutely, positively nothing to say about this. a situation very similar to how they have absolutely, positively nothing to say about monopoly companies in other nations.

    as far as i can tell, 99% of the writing and commentary on this topic is designed to destroy america. although it’s a complicated topic with many facets, it always comes down to the same thing. the number 1, overarching, absolute position that the US, and the US only, should ever, ever have any kind of tariffs, that tariffs make you lose, tariffs are how you come out behind instead of ahead, tariffs hurt your country, tariffs make your citizens sad because they have to pay more, and on and on and on.

    but other nations have big tariffs in place for decades, and the economics and financial writers have ABSOLUTELY NOTHING to say about it. shouldn’t they be writing articles every year about how japan and china are completely destroying themselves wit their insane, absolutely idiotic tariffs? what dumb morons, these asians, having tariffs for decades and decades. but i’ve never seen that article. not once.

    let me throw out this challenge: if tariffs are automatically, unequivocally, always, automatically, and without dispute the wrong thing to do…

    why is china reacting to new US tariffs by…raising their own tariffs?

    isn’t that automatically the wrong thing to do? shouldn’t china instead just stand back and laugh, point at how stupid the US is, and wait a few years until america crumbles into dust? indeed, shouldn’t china have zero tariffs of any kind on any good or service?

    why has china’s response every single time, to escalate tariffs tit for tat? aren’t they doing the EXACT wrong thing per the doctrine of decades and decades of american writing and teaching on tariffs? shouldn’t they be doing absolutely nothing in response? other than smugly smoking a cigar with the editors of the economist magazine, i mean. US tariffs of 100% on chinese goods, while china reduces their tariffs to 0%, would mean china wins and america loses huge. correct?

    • Agree: Achmed E. Newman
  40. @bluedog

    Why did you feel the need to come on here and give Mr. Buchanan a hard time, when the man has always had what’s best for real Americans in his heart? (Yeah, I know, it’s not likely he reads this stuff ..) I know you from the Commie crowd on here, Bluedog, and you didn’t answer why you should be worried at all about the tariffs if they won’t affect China. Personally, I think they will, as from even before the Clinton administration gave away the sweetest deal for them, it’s been unfair, and ever since.

    Let China serve their own markets, as I’m sure they could, and let us build up some manufacturing human and real capital up again. What the hell’s it to ya?

    And yeah, right now, “THEY” aren’t in a positions to keep me away from the keyboard, but who knows how long that will last? This place ain’t China in that respect …. yet…

  41. RJJCDA says:

    Tax Regime #1: 0% tariff on foreign trade/100% tax on income.
    Tax Regime #2: 100% “proscription” of foreign trade/0% tax on income.

    Which Tax regime would have a functioning economy?

    Free trade is based on a materialistic and deterministic ideology. But it is human volition which governs economies, and much else. With the advent of the industrial revolution, every day has seen the value of trade diminish as manufacturing is not constrained by and limited to a specific location. Come advances of and widespread distribution of 3D printing, most anyplace could become a local or regional manufacturing hub. Cross-border trade will be rare, and seen as an anachronism.

  42. @David

    Well, perhaps it’s because I’m going back to 10 years or so when I’d read the guy regularly. I don’t know about his personal life, David. When I read him, his views were that of a Constitutionalist and Libertarian. What I didn’t like was that it pretty much became the same-old-same-old. I mean, the column would be about another scandalous thing that the US Feral Gov’t was up to that should be none of its business, but how many of those could I read?

    Anyway, because Paul Craig Roberts doesn’t allow comments, I don’t read his stuff here. Whether in support or in argument, I would like to have a chance to comment. Thanks for the reply, David.

  43. Yee says:

    prime noticer,

    I thought the “making our own stuff” argument have already been proven by Latin America’s “import substitution policy” that once you reach the middle income stage, it wouldn’t work anymore. And the US has long passed that stage…

    The current tariff war is not about “bring back jobs”, as anyone with economic common sense know it wouldn’t. Well, unless you have a total collapse of the current system and start over. It needs huge amount of investment but have low returns. You won’t find many capitalists want to take it.

    Commenter “nsa” probably guess right, the tariffs is used as a weapon, to force China to open financial sector.

    I don’t really understand why the US choose this way to solve a problem. There’re at least 4 billion potential customers in the world who are in need of industrial products. Why not do something to develop new markets? Surely the US policy makers understand that the US market, however well protected, is not going to keep Americans in their high living.

  44. “I thought the “making our own stuff” argument have already been proven by Latin America’s “import substitution policy” that once you reach the middle income stage, it wouldn’t work anymore. And the US has long passed that stage”

    why do japan and korea have tariffs then? don’t tariffs just hold them back big time, and slowly destroy their countries? strangely, all the economic data says the opposite.

    i’d like to see korea and japan tariffs in particular addressed in excruciating, PHD level detail by the writers and editors of the wall street journal, economist, et cetera. what am i missing here, that these much smarter, credentialed experts understand and i don’t? they better be able to explain how japan and korea are destroying their economies with tariffs, and are stupid dumb losers headed for second world status, if they keep up these idiotic tariffs.

    “The current tariff war is not about “bring back jobs”, as anyone with economic common sense know it wouldn’t.”

    they will bring back some jobs, already happening in steel and other industries. but you are correct that this is only part of the reason for the tariffs. a lot of the point is to encourage china to shift location of production, or force them out of production entirely.

    like, for instance, how toyota, honda, mercedes, and BMW build and operate factories in the US to produce their cars in america. when they could just do that all in japan and germany, capturing 100% of the money. instead, existing trade situations force them to employ thousands of americans, losing some of the money, in order to avoid higher fees for building their entire fleet at home for export. “These jobs aren’t coming back!” well, the foreign companies literally create thousands of jobs in the US in the face of economic penalty.

    a 25% tariff is high enough to bonk them out of lots of industries. you don’t need to go higher than that to make the margins low enough that it completely blows up their business model. this is right around the place where they start deciding to build the factories in the US itself, to avoid that hit. strangely, i don’t think i’ve seen this mentioned a single time in the entire discussion, across years of stupid arguing, and thousands of commenters weighing in with their not so informed opinions.

    • Agree: RadicalCenter
  45. Biff says:

    Pat, you’re a great historian, but you’re failing economics on this one. Tariffs are good if you’re trying to build an industrial base, but that’s simply not the case in this situation.

    As other commentators have pointed out, the tariffs come from boxing corner advice to try to overcome your opponent. Just trying to beat up some else’s economy so yours looks better.

    I don’t see any American investors who would run the risk and of trying to build a State side industry that would directly compete with Chinese jobs/work force. Nobody’s going to buy the widget for five times the price – and it has a lot to do with labor costs, and I’m not talking about what the worker gets paid per hour; hidden inside are payroll taxes, bean counters, multiple layers of insurance, and mountains of government regulation(think safety) that comes with a hefty price. There’s a reason industry split town.

  46. Pat, we need to bring back tariffs – not to make us great, but to protect us from the commercial rape and betrayal of the United States institutionalized by its first “free trade agreement”, the Israel Free Trade Agreement of the mid-’80s.

    Talk about the worst deal in the history of the U.S., no wonder the president won’t mention it.

    No wonder it was opposed by every cohort on U.S. shores – only to be rammed through by yet more Israel-First lobbying and spying.

  47. Dutch Boy says:
    @bluedog

    I note that Paul Craig Roberts thinks domestic content taxes on corporations are a superior method to achieve Buchanan’s aims (a return of manufacturing to the USA).
    http://www.unz.com/proberts/the-tariff-issue/

  48. Yee says:

    prime noticer,

    Countries like Korea, Japan and especially Germany, runs a huge export economy. They make globally competitive products, not just for their domestic market.

    Actually, to create jobs, I believe you should strengthen your export instead of trying to take back low-end jobs from China, as a much smaller Germany is only slightly behind you in export…

    Top exporter:

    1 China
    2 USA ($1.66 trillion)
    3 Germany ($1.56 trillion)
    4 Japan
    5 Netherlands
    6 Korea

  49. @clyde wilson

    Tariffs are no benefit to the American people as long as capitalists can import all the foreign labour they want.

    American capitalists have been doing that since before the Mayflower landed. To do “the jobs Americans won’t do”.

  50. @Achmed E. Newman

    Tariffs were the American Federal Government’s MAIN SOURCE OF INCOME, for a century or more.

    Well, what do you want? Revenue or protection? At some point the two interests diverge, kind of a Laffer curve for trade.

    Raising the tariff to 25% would produce more revenue. Raising it to 250% would probably not.

    Bringing back the embargo of 1950-72 would reduce tariff revenue to nothing. But it would be the strongest protective policy imaginable.

    • Replies: @Achmed E. Newman
  51. @Reg Cæsar

    Reg, did you see that “cut by 90%” part?

  52. @map

    Tariffs (ie protection) have a good point in the take-off phase of an economy (ie to create a “first world economy”). However, there are other approaches; quotas, subsidies, regulation of foreign entry into domestic markets that can/should be used.
    However, to properly employ these methods a State needs a detailed unified economic policy. The US has not had such a policy for years now.
    Further, let’s recall that Trump’s tariffs have very limited economic purposes. The tariffs primary purpose is to hurt China sufficiently for it to agree to Trump’s political purposes. Simply put, lacking a unified economic policy, the US can not compete with China. Therefore, it’s only option is to destroy China’s (2025) Policy. — ie to gain leadership in 10 key 21 C technologies (AI, 5G etc).
    Trump’s attacks on Harwei are more of the same.
    If the US really wanted to begin revitalising it’s economy it could simply tax US co’s the labour savings they make by off-shoring anywhere.
    But this can NOT happen — it’s not what US elites want.

  53. @map

    Hyper-inflation was in part the German government’s response to the near impossible burden of reparations.

  54. @nsa

    Forcing China into liberalised financial markets like the US is another effective means of destroying China’s economy.

  55. Wally says:
    @Parisian Guy

    “Why would have chinese given subsidies to these corporations?”

    Because they employ vast numbers of Chinese.

    And they can “share” / steal the foreign technology, as is required in their agreements.

    Pay attention.

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