Trade War may be Necessary
We have been losing the trade war with China and others over the past 40 years watching our jobs leave this Country. Who believes that Americans can’t build the very products that we import every year from China, Japan, India and others. The large Corporations do what is in the best interest of their bottom line and to their stockholders. The question is would they still move jobs overseas or south of the border if they could make their products here in the USA. The consumer, that would be all of us has been looking for the best deals regardless of where the product comes from. We do the very same thing that corporations do, looking out for the best interest of yourself and your family. The problem is America makes trade agreements with nations like China but many business’s can’t compete with their cheap labor. China has also kept their value of the Yuan low to make their exports less expensive than other nations. The question is how long can we sit by and watch China not play fair with all nations without doing something besides complain.
Obama made a speech on trade talking about doubling exports from the United States but with no clear plan it seems on how to accomplish this goal. The problem with most trade agreements is that we have an open and fair border for trade, other nations don’t seem to play by the same rules. China for instance has used its money policy along with making it much more difficult to import products. The U.S.-China agreement that allowed Beijing to join the WTO, has provisions within the agreement to stop China from what it is doing. Designed within the agreement there are provisions to prevent injury to American industries and workers from import surges or unfair trade practices, these include provisions allowing restrictions on Chinese imports that disrupt U.S. markets. Bush tried in vain as well to get China to practice fair trade but was unsuccessful in the attempt. Obama must realize that China has no reason to cave to pressure unless we do something that forces them to change.
The Bush administration kicked the idea around in 2003 if negotiations failed to impose a tariff on Chinese goods. The bill was never moved forward and there is mixed feelings about how effective it would be. The Heritage had an article Undervaluing the Damage of a Tariff in 2003 opposing the tariff saying it would only cause more damage than good. We are now seven years later from then and nothing has improved one bit, China has continued without pause. The question is will China ever change without the United States doing something to force change of their unfair trade policy. Donald Trump has proposed adding a tax/tariff of 25% to all chinese imports but there are questions of whether that would help or not. The could just move the factories to India or somewhere else in Asia and would that even help jobs here? The U.S. Bureau of Labor Statistics estimates that China’s average hourly manufacturing wage—about $150 to $200 a month—is about 3% of what U.S. workers make. There really in my mind is no way for any American manufacturer can compete with such low wages.
We import about 264 billion dollars of Chinese goods every year now and they only import around 64 billion of American goods. The question is would a 25% tariff only hurt the American consumer and not help the American worker. Our trade agreements have helped us keep our consumer prices low but we have lost many manufacturing jobs in the process. We have moved to a more service based economy over the past thirty years with nothing appearing to change soon. I just don’t believe that a tariff would be the answer to this problem, our Government must continue to pressure China to trade fairly. We must continue the pressure, if they continue down this path of unfair practices then more drastic measures must be enforced upon them.
Blaine A Dunning