It's not a question of 'fairness', it's a question of what will actually improve our economy. Nothing out there suggests tariffs will do that; in fact, all data points to just the opposite.
But you've basically ignored the OP in any case; do you have a response to the rather realistic and obvious projection that, given the nature of these, assembly jobs will move out of the US, since the fully assembled goods are not subject to tariffs, but the parts are?
"The fact is that there is a strong feeling in the developing world that trade rules do not apply equally. Indeed, Washington lost the moral high ground earlier this year when it slapped steep tariffs on steel imports and locked in subsidies for its farmers. As well, the US has in place a sophisticated regime of non-tariff barriers such as anti-dumping laws that exporters from developing countries have found difficult, if not downright impossible, to circumvent. "
(The "non-tariff barriers" are important - all kinds of environmental and safety standards could be considered as these, and they can be far more difficult to deal with than simply paying an import duty. This is another thing a lot of Brexiteers haven't realised)
I'm glad the US has environmental and safety standards and enforces those (to some degree) on imports. Those actually accomplish some good and have positive externalities.
It's also worth noting that other countries have significant non tariff barriers as well, perhaps more significant than the US, and ones with less positive effects. Some Chinese examples are the Great Firewall (https://www.nytimes.com/2016/04/08/business/international/ch...) and fact that a large part of the Chinese economy is still state-owned (and could be politically directed to avoid importing American products without any need for a tariff).
You do know the US is already heavily protectionist and many tariffs are protections against the US's price dumping due to its heavy subsidies, right?
And that the US already has plenty of tariffs to boot?
The USA became the world's largest evonomy with massive tariffs on basically all imports. Smoot Hawley Act anyone? Those were removed gradualy starting in the 1970's and lo and behold the trade deficit sky rocketted while the manufacturing economy plummeted.
and here's an article arguing why there's no US-EU trade deficit, in German, though: http://www.sueddeutsche.de/wirtschaft/handelsstreit-usa-eu-h...
what they argue for: sure, looking at goods, there's a deficit for the US. But once you take services and primary and secondary income into account, then the US actually cuts the better deal with the EU.
imv, trump/the current US gov are twisting the numbers to get a better deal.
> trade deficit sky rocketted
Is a trade deficit important to not have?
> manufacturing economy plummeted.
By which metric?
Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.
Having chineese bussinessmen buy up all the valuable real estate in our biggest cities is a result of the trade deficit.
Massive underemployment (more baristas fewer mechanics) is a result of the trade deficit.
>Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.
More English soccer teams are owned by Americans than all the russians oligarchs and arab sheiks combined.
>foreign direct investment
>sheiks owning the sports teams and chineese businessman owning all the prime housing
We're saying the same thing
That's because you still haven't answered the original question:
>>> Is a trade deficit important to not have?
E.g., consider your examples:
>sheiks owning the sports teams and chineese businessman owning all the prime housing
Given that I'm not the type of person who buys sports teams and prime housing (of the sort purchased by Chinese businessmen), why should I care about that style of FDI? I mean, I guess it must suck for the American ultra-rich that they now have to compete with the Chinese ultra-rich for access to ultra-veblen goods like owning sports teams, but... why the hell should the rest of us care which mega-rich person owns the local sports team!? What possible material impact could that ever have on us?
The only type of FDI that effects my life is FDI in productive assets, like factories, and those are strictly good for me (more and better-paying jobs).
"So we lost the Toyota factory but on the plus side the sports team isn't owned by a Sheik" seems like a really dumb trade-off. What am I missing here...?
generally regarded as making the depression worse.
I don't think I've ever seen someone defend that.
Get back to the original point: why is it acceptable for other countries to levy tariffs against the US but not the other way around?
The country we have the least trade barriers in the world is Canada. He started a trade war with them.
He ran on a platform of ending free trade agreements & protectionist policies. He’s enacting them. So it’s hard to take him serious when he suggests a free trade agreement with the g7 as a throwaway talking point.
Really, cause they described Trudeau as stabbing them in the back and said there is a special place in hell for people like him. He said Canada would respond with tariffs after Trump put in tariffs.
Here is a perspective from the Norwegian foreign minister [1], with google translate [2].
The key word here is uncertainty and unpredictability.
[1]https://www.nrk.no/urix/_-vi-ma-jobbe-annerledes-med-donald-...
[2]https://translate.google.com/translate?sl=auto&tl=en&js=y&pr...
e.g. Sebastian Kurz, a few days ago (1): "The American President is unconventional and American politics has become unpredictable. [...] This is a challenging geopolitical situation."
(1) German Interview - https://derstandard.at/2000081642343/Kanzler-Kurz-Wer-auf-Or...
China has gone from a $1 trillion to a $13 trillion economy in 20 years, with vast barriers to trade (into their country) and extreme domestic protectionist policies (eg barring majority domestic business ownership, and most foreign acquisitions).
China is the greatest one-way mercantilist economic result in recorded history. There's very little trust in any relationship with China, they do literally whatever they decide fits their nationalist aims, whether that's annexing territory, stealing corporations (Ant Financial), forcing technology transfers, blockading foreign ownership, whatever it takes to buy time until China is impossible to resist. China is already buying up Eastern Europe, and buying votes within the EU (eg bribing Greece for favorable voting). Is that a premise of trust? Of course not, they're using their increasing might strategically wherever they can, and it's going to get a lot worse.
The fact is, all nations should pursue their self interest. When the US decides to act as everyone else does and pursue its economic self interest, it's denounced. And there's China parroting that they're in favor of free trade, while being aggressively against free trade in practice, and hardly being called out for the hypocrisy internationally.
The reason the US is denounced, is because the export gravy train is coming to an end, the easy exports into the US that many other large economies have enjoyed are going to get more expensive going forward. If that wasn't the case, all of these other nations wouldn't be upset about the US change in behavior: they all know the US is an immense global consumption engine that powers their domestic production.
Responding to psergeant's comment below:
> I wonder if you could help me understand Trump trying to rescue ZTE in terms of what you’ve just said?
The US got China to immediately sign off on the Qualcomm acquisition of NXP in exchange for the ZTE deal. That's an extremely valuable acquisition for the US tech industry.
Simultaneously the US has received $2.2 billion in fines from ZTE over time for their violations of US sanctions. Further on top of that, the US is getting even more compliance pledges from ZTE.
It's a substantial self interest win for the US. The US gets to eat one of Europe's valuable tech companies (of which they have relatively few), which then reduces Europe as a tech competitor over time. I'd call the ZTE deal a win, win, win, win arrangement.
This leads to hugely destructive wars. The history of the post-war order has been trying to build common interest through multilateral institutions.
>> This leads to hugely destructive wars.
> Nonsense. Self-interest != hostility.
Right. Just because someone is looking out for their own self interest doesn't mean that they are constantly "winning" a zero-sum game with someone else. In fact, sometimes cooperating is the most self-interested move you can make...
Which is exactly why all of these other nations might be "upset about the US change in behavior" without necessarily prescribing any course of action that isn't also in the US's best interest.
Okay, why should North Korea cooperate with Trump?
Why should Iran?
He says one thing then turns around and does another. How do you come to an agreement with that sort of person on anything?
It's not about having good or bad policies. It's about being able to do any sort of good faith negotiation.
— The NY Times
China’s weight average tariffs are 3x higher than the United States, approximately 10% vs 3.5%.
"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."[1]
The point still stands when not considering VAT, but the difference is far less pronounced. Though I am hesitant to trust the authors' research given the above.
[1] https://www.nytimes.com/interactive/2017/business/trade-chin..., also https://tradediversion.net/2017/03/08/on-the-nyts-building-t...
U.S. exports to the European Union enjoy an average tariff of just three percent.
Source: https://www.export.gov/article?id=European-union-Import-Tari...
In 2016, according to the World Bank, the average applied U.S. tariff across all products was 1.61%; that was about the same as the average rate of 1.6% for the 28-nation EU
Source: http://www.pewresearch.org/fact-tank/2018/03/22/u-s-tariffs-...
US to EU average import tariffs differ only by ~1.4%, sure the US tariff is (slightly) lower but it's hardly a huge imbalance.
Edit: just picking up from morsch's comment, these are international trade tariff figures which is what Trump is imposing. What countries do internally when it comes to sales or Value Added Tax is a whole different thing; these types of taxes apply to all goods and services sold within that country, regardless of origin (i.e. regardless of whether a pencil is manufactured in the UK or the US, it will still attract a domestic sales/VAT of 17.5% if sold in the UK).
Talking about fairness, it is fair for US to print their own currency and buy goods around the world, while other countries can't do the same? The reserve status of dollar doesn't come by itself, there is a price to pay, you can't have the cake and eat it.
Japan has nearly 200% higher agriculture tariffs than the US.
Which have a lot of holes in them. The US sends thousands of tons of un-tariffed rice to Japan every year, which they then lock into a shed and let rot. Which is their prerogative, I guess.
I see this comment a lot, I think Trump also said this, but I wonder what specific tariffs is this talking about?
My country (Netherlands) has a negative trade balance with the US, we buy a lot of software, entertainment and (heavily subsidized) Tesla's from the US. Even the "German" car I drive (a BMW) is manufactured in the US because of US trade demands. Also many international trade laws are heavily influenced by US policies that mostly benefit the US (i.e. IP, drugs).
It seems pretty clear that Trump started this trade war because he didn't like the existing equilibrium. And because he is who he is, other countries must be to blame.
I think US people will have to get used to the idea that maybe the US economy is not competitive and US people have been living above their means for a long time now. There are a lot of things the US can do to improve their competitiveness: education, health, corruption, equality, finance all have real impact on the economic competitiveness of a country and you can't make a mess out of it without it having real consequences.
US companies also will have to learn to deal with the fact that the US no longer is the single biggest economy in the world, and the US can't set the rules unilaterally. Trump is helping a lot weeding out the diplomatic goodwill that the US historically enjoyed.
US business is spoiled with their huge home market and seems to find it very hard to adapt to smaller country's rules. In order to export successfully in a more level world, you have to play it by their rules. If my country want to export flowers to Japan, and they allow them only when sterile and without a grain of sand, and they only like bright colors, then we will make them so.
Your car was built in the US because the labor is cheaper and 40 percent of their cars are sold in the US and China (shipping to China from the US is basically free, better off being here).
The reason for starting it was explained in completely different ways. Therefore it's not clear. It's both for security reasons as well as being easy to win as well as a supposed unfair imbalance. There's no consistency.
And yet other countries never seem to entertain the idea of both sides getting rid of all their tariffs, which is something Trump suggested at that G7 summit.
Everyone goes nuts when the US suggests implementing tariffs against countries that already have tariffs against us. You gotta admit, the message seems to be that other countries are allowed to protect their domestic industry via tariffs and the US is just supposed to deal with it, don’t wanna start a trade war!