Trump’s Anti-Trade Policy
Trump wants to raise high tariffs to discourage trade with other countries. Such tariffs discourage imports. They also trigger retaliatory tariffs that discourage exports. Trump wants a buy-American policy. In other words, Americans should earn their living by taking in each others’ laundry.
Why won’t this work? By analogy, imagine a family that refused to have any trade with the outside world. They would produce everything they needed for each other. They would all quit their outside jobs. Why won’t this work?
~ Roedy (1948-02-04 age:70)
- There are many things they want, e.g. tropical fruits, that they can’t make within the family.
- You can’t get any decent mass production going when the total market is no more than 3 items.
- They would have to go without products that require specialised knowledge or equipment to make.
- If something goes wrong with the one person who handles in-house production, they can’t buy replacement food or goods elsewhere.
- They can’t specialise. They have to make a little of everything. The goods are thus more expensive in terms of labour and are lower quality. For example, Japanese and German cameras prices will soar.