No surprise, just yet another reminder that the orange shitbag has no clue about economics.....
CHICAGO — Cedar Electronics has been selling CB radios to American truckers since the 1960s, helping connect the workers who keep the U.S. economy rolling. But these days Cedar’s business isn’t exactly trucking along.
The Chicago-headquartered company is racing around Asia looking for other countries to host its manufacturing, after the radios Cedar makes in China and brings to the United States were hit with one of the Trump administration’s 25 percent tariffs this summer, making them more expensive to import.
The White House’s decision to extend its tariff campaign to an even broader range of Chinese imports starting Monday is putting similar pressure on more U.S. companies to uproot their Chinese manufacturing, and to consider layoffs, price hikes and investment cuts.
“We are looking as fast as possible to find an alternative [manufacturing] place, but we’re dealing with a very unstable situation,” said Cedar vice president Mark Karnes, referring to President Trump’s penchant for issuing policy decisions by tweet. He added: “As a business, my government just clubbed me over the head.”
The Consumer Technology Association alone has heard from hundreds of U.S. member companies hurt by the levies, many of which are small businesses ill-equipped for this sort of tumult, said Sage Chandler, vice president for international trade at the lobbying group.
“Eighty percent of our companies are small and medium enterprises,” she said. “They don’t have trade experts on staff. They don’t have customs people on staff.”
More than 80 industry and agricultural groups this month backed a multimillion-dollar campaign, “Tariffs Hurt the Heartland,” to oppose the White House effort. The groups are holding town-hall events and running advertising arguing that the tariffs are causing job loss and higher prices for consumers.
More at
https://www.washingtonpost.com/busi...187f427e253_story.html?utm_term=.09aeab08216f
Trump apparently got tired of always doing the wrong thing for the nation and decided to try doing the right thing the wrong way for a change of pace.
The idea of free trade is supported in economics by the theory of comparative advantage, proposed in the early 19th century by the classical economist David Ricardo. While there is debate about whether this theory was valid for Richardo's early 19th century farming and artisan economy, and I don't see how it could have been, I don't think that anyone seriously believes that it could be valid for an industrial economy like ours where financial capital, i.e. money, and intellectual property, i.e. know how can cross borders in milliseconds. Absent this there is only an absolute advantage, in this case dramatically lower wage rates, and the US can only be a loser by pursuing free trade.
There might be reasons to make a concession with a low wage country for other reasons, for example with Mexico to partially relieve the problem with illegal immigration, but I can't see how it is justified to improve the last remaining communist country on the planet and our nominal enemy, China. Opening up our workers to a competition with much lower wage workers can only have one result, the lowering of wages in the US and the resulting higher profits. Which could be why we pursued free trade because this is the desired result that conservatives have been trying to accomplish for seventy years or more.
We were the driving force behind globalization and free trade. It would have been much better if we had continued to resist it instead. Many if not most of the other technologically developed countries would have supported this and we would have been much better off today with higher wages and lower profits.
So while Trump is correct that we are the losers in free trade, he is going about correcting the problem the wrong way. Changes like raising tariffs must be made slowly, incrementally and across the board in concert with our trading partners, not a unilateral 25% on favored products on the flimsy grounds of national security.
