Paul Krugman: Oh, What a Stupid Trade War Excerpt: As usual, Krugman is spot-on with his reasoning. Trade-wars are bad for everybody, including the country that starts them. Does Donald Dork give a damn? Nahhhhh ...
The question everyone should ask themselves, "which industry would i be willing to sacrifice at the altar of global trade?". Is no industry worth protecting for national security concerns?
Trump is trying to get fair trade deals for American consumers and workers, not start trade wars!! God bless him!
The U.S. has the right to insist that trade with other countries is fair. Fair trade is not stupid. It's just fair to both countries. What sounds stupid to me is to insist that the U.S. should submit to unfair trade with other countries. Now that is what's stupid.
National Security is NOT THE PRIMARY CONCERN. No major threat exists to the US from a foreign nation likely to attack it with nuclear missiles, and most industries dependent upon imported products are unlikely to change habits. They will simply assume the higher costs and pass them on to Dick&Jane America. The threat comes from the fact that, due do Dumb Donald Dork's unilateral augmentation of import taxes, he has: *Caused a major crisis that will raise costs of imports (of both finished goods and parts necessary as components of American products). And, *Which will forcibly induce higher shelf-price costs for American consumers of some products. Donald Dork has not understood this: *The higher import prices for some critical parts of automatic devices (also known as a "car" or a "truck") will simply raise their final final market-price. And, *American companies are NOT going to switch to local manufacturers because there likely are (a) no longer existing or (b) by doing so the final cost would be the same or higher than the present import cost (so why change?) All of this for a campaign-promise (idiotic to begin with) that will upset foreign-trade patterns for years to come? Look boyz-n-girls, this guy is not only sick-in-the-head but as a result very dangerous ...
I certainly won't deny the benefits to global trade but it comes at a cost to social outcomes. You may not recall the Nixon soybean embaro, or Carter's Russian grain embargo, or OPEC's oil embargo of 1973, or the oil crises of 1979. There are many number of reasons that may disrupt global trade, nuclear war would be far down the list. The point is, nations that are dependant on other nations for their economic health and security are in a much more insecure position than nations that are more self sufficient in key industries.
not really because economic trade and dependency makes war impossible or far less possible because it will collapse your economy and perhaps leave you without critical resources. Plus the more with whom you trade the richer you get.
It's not worth the cost of prolonged trade deficits. If all international trade suddenly stopped and U.S. companies were given 4 or 5 years to adjust, would that many jobs really be lost in America? I'm looking at a graph and U.S. trade with all other countries represents about 22% of GDP. Now, of course a portion of that could easily be switched over, and another third maybe represents countries the U.S. doesn't have a problem with. I don't think there's really any big fundamental issues between the U.S. and Europe (both have similar labor costs and regulatory frameworks), the only main reason there's a problem is that the E.U. isn't playing fairly, having put up one-sided tariffs of their own, and combined with differences in their tax law (not amount of taxes but how things are taxed).
ESTABLISHED MECHANISM FOR TRADE AGREEMENTS Don't you think that ALL countries think the same way? Where you or I get the means to pay for our next meal is a universal concern. The European Union is a grouping with less GDP per person than the US but a population twice as large. Do you think that they are not as concerned as you (plural) in America? That's why Trade Negotiations were the reason the World Trade Organization was established in 1995. It functions upon the General Agreement on Trade and Tariffs that was established post-WW2 in 1947 - and has since evolved into the WTO. It is there and not in the White House that international agreements regarding trade are both negotiated and established. It's been working slowly but well enough for more than two decades. Both NAFTA and the WTO are part of a long-standing international agreement called GATT (General Agreement on Trade and Tariffs). AND FINALLY ABOUT JOBS Most losses in both the US and EU are due to the fact that we are passing "ages". Yes, the Industrial Age in most developed countries is giving way to the Information Age in economic terms. Right before our eyes. Which is why job losses have been massive in both the US and the EU - both are in the same boat. Meaning what? Both must undertake massive programs to educate its workers to a higher standard of tertiary education required by the Information Age ...
There's no need for that. For example, free trade provides a mechanism to 'win' the socialist calculation debate. There's certainly a need to allow protectionism in the developing world. Growing infant industries is key to removing threat of civil war (which is guaranteed with skewed focus on raw material exploitation).
