explain how China is the world's fastest growing economy and has the fastest growing living standards while being one of, if not the most protectionist countries on earth?
According to most economists and their textbooks their growth should be terrible because they are so anti free trade
The only people who benefit from low tariffs are the rich, who can then outsource production and ship goods back into the country with no consequences. That's why income inequality has skyrocketed in the last few decades. The supposed savings of outsourcing weren't passed back to consumers, it was pocketed by the rich
I wouldn't say tariffs are China's reason for success or anywhere near it. That said, China and the US are drastically different.
It seems that most of their protectionist polices are about moving China from dumb labor into a tech hub. Global companies are forced to partner with a local business. This keeps some profits in China as well as locks businesses in and gives the local company the ability to do its own designs or even just steal IP outright. While frustrating, this is actually a pretty cheap exercise for the global entity. Sign a deal, do some meetings, fill some paperwork and boom you have access to a billion users and very cheap labor. The cost of competition comes later and many many businesses take the deal.
Contrast this with tariffs that are just a dumb tax that immediately bite into profits and don't directly promote growth locally. If you actually want to target US businesses, you'd be supporting subsidies not tariffs.
>The supposed savings of outsourcing weren't passed back to consumers, it was pocketed by the rich
I mean, this is just clearly false. The savings literally have to be passed back to the consumer or the Chinese goods would not out compete local goods and there would be no problem.
Ease of doing business report only deals with formal legal requirements and paperwork, but running business is not only about law/tax compliance.
Access to labour, facilities, depth and readiness of local market to accept new things - all that matters.
I am not agreeing with assessment that legal compliance in USA is easier than in China at all. USA has hideously complex tax system, you can't do a single thing without a lawyer, and any dealing with securities is past all hope for a person who have not purposefully studied that.
US consumers are first and foremost US workers first -- and only consumers in as much as they have a job and they make enough to pay rent, consume, etc.
So while they might not get cheap global shit as easily, they'll be able to get jobs easier...
If your manufacturing employer consumes steel and that steel is now more expensive it means less of those jobs, not more. You're only pulling money from other US citizens and companies so its not really a gain to the US overall. It increases the cost of US manufactured goods that have to buy tariff laden supplies. This ends up hurting US manufacturing exports over all. All of this assumes we actually do pay for US steel but the reality is we'll just go to the next cheapest supplier which may or may not be local.
That steel is only cheap short term. Once China has a monopoly they can charge whatever they want. The only reason Chinese steel is cheaper is because it's lower quality and their government subsidizes it with long term strategic intent
There's some merit to this argument. If your goal is to hurt China's competitiveness in spite of what it costs US buyers than its a legitimate strategy.
However, this policy is being sold as a way to help US manufacturers and that's not quite the same thing. The benefits could easily go to other imports with weaker tariffs. This coupled with the problem of hurting down stream US manufacturers means that the only benefit is hedging against a Chinese monopoly and not the direct benefits that are usually talked about.
There's no incentive to raise wages. At best it forces Americans to pay more for certain goods but the idea that that money goes to workers is indirect. These Chinese tariffs just increase the cost of Chinese goods so unless the US is second in cost, they cut into US profits but increase the profits of other global entities. In the case of steel, Russian imports are up.
It's not just John Q Public that sees increased prices either. Increasing steel costs hurt US manufacturing jobs that use steel. Because tariffs don't bring in any new money abroad, it's US companies that are footing the bill. The net gain to the US is zero or even less if there are less manufacturing jobs because of increased resource costs. Less manufacturing ripples back into less profit for steel.
The US economic might was built on tariffs protecting american businesses. We became the largest economy in the world in the late 1800s due partly due to tariffs. It's also why europe, japan, korea, china, etc used tariffs to become economy powerhouses.
It's true that it can hurt consumers, but given how big our economy is and the resources at our disposable, I highly doubt it. Also, it could hurt american businesses globally, but considering the US is the biggest market in the world, I doubt it.
Also, anyone who believes Trump is propping up russian steel is watching way too much CNN, MSNBC, etc.
As everything in life, tariffs aren't all good or all bad. It can be good, it can be bad. To make a general claim that "it's not good policy" is factually incorrect. History proves this.
"Tariffs help US businesses and american workers. It's why the first major act of congress was a tariff."
Well, one can argue about whether or not tariffs help domestic businesses and workers, but that was not the reason tariffs were one of the first major acts of congress.
It was one of the first acts because tariffs were THE major revenue source for the US federal government. Remember, those were the days before things like income tax.
Absolutely, like most things economic, we can debate the merits forever. But what's not debatable are economic and historical facts. The blanket claim was that tariffs hurt US businesses and workers. We know this is factually incorrect because we can look to the US economy and businesses in the 1800s where we rose from a relatively underdeveloped nation to the largest economy in the world with the world's largest businesses under a tariff heavy century. We can look to west germany, japan, korea and now china also.
Now that doesn't mean tariffs never hurt businesses. My belief is that tariffs can help or hurt businesses. I don't like ideological blanket statements like "Tariffs are always bad" or "Tariffs are always good". Tariffs are a national tool. Like any tool, it can be use for good or bad.
