There are economic, geopolitical and moral reasons to increase protectionism, says Robert Lighthizer
grew in the 19th century from a modest agricultural country into the world’s largest economy, tariffs were critical to its success. In recent decades, however, the T word has become toxic to some. Free-trade purists argue that tariff increases destroy capitalism. When tariffs rose during the Trump administration, and that didn’t happen, the purists claimed that we should ignore the facts and rely on their antiquated economic models.
These massive trade deficits also drag down American economic growth. Countries with persistent trade surpluses artificially lower global demand. Rather than expanding global production by buying foreign goods , such countries use massive market distortions to replace foreign production capacity with their own and use the proceeds of trade to buy long-term assets in countries with deficits. This slows growth in the deficit countries, particularly America.
America should change its own policies because making things matters. There is an obvious national-security benefit from having a vibrant manufacturing base. America doesn’t just need munitions factories. In times of war it needs basic manufacturing, so it can scale up in order to, for example, make the steel used to build new defence plants.’s Cesar Hidalgo have shown, manufacturing a wide range of complex products is essential to building a high-performing economy.
Economists have long recognised that in cases where significant distortions cannot be removed from a market, a second-best option is to take steps to offset the distortion’s effect. As Michael Pettis, an economist, points out, offsetting such foreign interference actually makes markets more efficient and increases the benefits of trade. For example, if a country subsidises a product or if a company dumps in another market, global rules allow the use of tariffs in response.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
WTI Sheds Over 1.6% As Demand Trumps Everything ElseOil prices shed over 1% on Monday despite rising tensions in the Red Sea and on the front lines of the Israel-Hamas conflict
Read more »
Inter Miami player ratings vs Real Salt Lake: Lionel Messi makes those around him shine! Argentine brings out the best in Herons' goalscorers Diego Gomez and Robert TaylorThe Herons began their campaign with three points behind goals from Robert Taylor and Diego Gomez
Read more »
Biden’s “limited” memory; Donald Trump projected to win in NevadaThe latest news in US politics, with coverage of Joe Biden and the Democrats, Donald Trump and the Republicans plus daily updates about the 2024 US election.
Read more »
NATO criticises Donald Trump for comments that 'put American and European soldiers at risk'NATO made the intervention after Mr Trump said he would let Russia 'do whatever the hell they want' to members of the alliance that don't pay enough for defence at a rally in South Carolina on Saturday.
Read more »
Europe must hurry to defend itself against Russia—and Donald TrumpThe ex-president’s invitation to Vladimir Putin to attack American allies is an assault on NATO. Ultimately, that is bad for America
Read more »
Donald Tusk’s uphill battle to restore the rule of law in PolandAlso on the daily podcast: a new satellite for aerosols and the ‘motherhood penalty’
Read more »