Thursday, June 7, 2018

Do We All Agree Now: Trade Tariffs Are Awful?

The rapid response to the trade tariffs President Trump has proposed from countries around the world indicates that nobody likes trade tariffs.

Americans don't like trade tariffs which they perceive are hurting our ability to export fairly. When markets aren't open to our goods and we can't export it hurts our workers who aren't employed by companies that would like to export. It seems highly likely this is the same picture in other countries.

If one countries taxes (the government take) an imported product at 10% while another taxes at 30%, then the lower tax-rate nation is going to be hurt. Retaliation is a natural response, but that quickly leads to problems for everyone.

Perhaps we should all adopt one trade standard or find some kind of formula for compromise which could be applied in any two-nation trade situation.

I suggested years ago that America adopt the same rate which other countries apply to our goods. Just mimic that rate whether it is low or high. That way it is instantly balanced between the two nations. Perhaps blocs of nations such as North America or the Euro Zone or East Asian nations would adopt one rate, but that would be up to those nations. If America was to always simply adopt the rate of the other nation or bloc of nations, then our task would be simpler.

What could be easier? What could be more fair?

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