David Stockman on the Fallacy of Reciprocal Tariffs
Posted by freedomforall 3 weeks, 4 days ago to Economics
Excerpt:
"So the question recurs: Are all the Bad Guys that Donald Trump rails about mainly in the 13 biggies listed above, while the balance of the 180 countries of the world are generally fair traders, as measured by the US surpluses (on net) with them? Or is the story considerably more complicated?
We will go with the more complicated route, but do so by dividing the question in two:
Is the alleged cheating mainly a matter of tariff barriers that could be countered, at least in theory, on a tit-for-tat basis as per Trump’s pending April 2nd reciprocal tariffs?
Or does the problem mainly lie outside of the tariff arena–either in NTBs (nontariff barriers) abroad or counterproductive economic and monetary policies at home?
What we can show below regarding the first question is that whatever the degree of “unfair” trade that may exist in the world market today, it is not owing to tariff barriers. The Donald’s rants about 350% dairy tariffs in Canada or 10% automotive tariffs in Europe or 50% motorcycle tariffs in India, are simply a case of “gotcha” argumentation. In fact, these horror stories either do not actually exist or are largely irrelevant to the big picture."
"So the question recurs: Are all the Bad Guys that Donald Trump rails about mainly in the 13 biggies listed above, while the balance of the 180 countries of the world are generally fair traders, as measured by the US surpluses (on net) with them? Or is the story considerably more complicated?
We will go with the more complicated route, but do so by dividing the question in two:
Is the alleged cheating mainly a matter of tariff barriers that could be countered, at least in theory, on a tit-for-tat basis as per Trump’s pending April 2nd reciprocal tariffs?
Or does the problem mainly lie outside of the tariff arena–either in NTBs (nontariff barriers) abroad or counterproductive economic and monetary policies at home?
What we can show below regarding the first question is that whatever the degree of “unfair” trade that may exist in the world market today, it is not owing to tariff barriers. The Donald’s rants about 350% dairy tariffs in Canada or 10% automotive tariffs in Europe or 50% motorcycle tariffs in India, are simply a case of “gotcha” argumentation. In fact, these horror stories either do not actually exist or are largely irrelevant to the big picture."
Seriously? Either that's reaching low for a criticism of policy or it's humor.