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Trumps Tariff's. Good, or Bad?

Discussion in 'Business & Economics' started by Old_Trapper70, Mar 12, 2018.

  1. Old_Trapper70

    Old_Trapper70 Well-Known Member

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    IMO, bad for the country, and bad for the global economy. I also see his "National Security" excuse as a scam to get around the WTO regulations.

    http://discovery.economist.com/trum...el-and-165576691?kw=all&csid=ppc&ref=trump100

    "Seen more broadly, the proposals look less “SMART”. Americans employed in steel-consuming sectors far outnumber those employed directly in steel and aluminium industries. Higher prices of inputs for products such as cars, air-conditioning units, refrigerators and beer cans will be passed on to consumers. If they respond by buying less, jobs will be lost. Studies have found that George W. Bush’s tariffs on steel in 2002 destroyed more American jobs than they saved. If the North American Free-Trade Agreement (NAFTA) continues in something like its current form, manufacturers could even avoid the new tariffs by shifting production to Canada or Mexico, from where they can export their final goods to America tariff-free. The tariffs may not even make for good domestic politics. Orrin Hatch, the Republican head of the Senate Finance Committee, complained on March 1st that “tariffs on steel and aluminium are a tax hike the American people don’t need and can’t afford”. Mr Trump’s move falls under Section 232 of the Trade Expansion Act of 1962, which allows the president to act without congressional constraints. But he still needs co-operation from Congress elsewhere, for example if he wants to renegotiate NAFTA. Beyond America’s borders the policy will be disastrous. The countries likely to be hardest hit by broad tariffs include close allies such as Canada, Mexico and South Korea.

    Under the rules of the World Trade Organisation countries are not supposed to introduce new tariffs. But there is an exception when national security is at stake. If other countries sue America in the WTO (several are planning to do so) and the body’s judges rule in America’s favour, the precedent would encourage many to erect their own tariffs on the same ground. (Countries, including America, have spent years trying to stop China from doing exactly that.) If the judges rule against America, Mr Trump is unlikely to bow and comply. An even bigger fear is that countries will not wait for a WTO ruling. It took 20 months for the WTO to rule Mr Bush’s steel tariffs illegal. Instead, they might take matters into their own hands. Chrystia Freeland, Canada’s foreign minister, promised her country would “take responsive measures to defend its trade interests and workers”. Mexico is reportedly planning retaliatory measures, too. The Chinese are unlikely to refrain from action. In 2009, after Barack Obama imposed safeguards on Chinese tyres, China responded with (illegal) restrictions on America’s chicken-feet exports. America’s agricultural sector is bracing itself for retaliation. There may be ways other countries can hit back quickly while sticking at least nominally to WTO law if they treat the American tariffs as a “safeguard” action. Countries are allowed to impose retaliatory duties against a state that imposes such tariffs when imports have not increased in absolute terms. Certain types of American steel imports, such as “long” products (which include rails and wire rod), have not been rising recently. So the European Commission has a provisional list of products. These cover steel, industrial and agricultural products in roughly equal proportions, though that may change over the coming days. In 2002 the European Union referred to this provision when it considered slapping tariffs on American exports such as orange juice.

    Meanwhile, Cecilia Malström, the EU’s trade commissioner, said the Europeans could also impose similar tariffs if America’s measures divert cheap steel and aluminium to EU countries."
     
  2. PLC1

    PLC1 Moderator Staff Member

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    Tariffs are most likely going to be counter productive, but the real question is this:

    Should the president have the authority to impose tariffs, or any other sort of taxes, unilaterally? When did he get that authority, and why? Remember, if one president has that power, than all the succeeding presidents will have the same power, which leads us to a broader question:

    Is expanding the authority of the executive branch a good thing?
     
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  3. Lagboltz

    Lagboltz Well-Known Member

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    This president does whatever he wants. It's up to the courts to slap him down as he exceeds his authority.
     
  4. BigRob

    BigRob Well-Known Member

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    The tariffs are generally a bad idea.

    The President has the authority because Congress gave it to him in Section 232 of a 1962 law, the Trade Expansion Act. Otherwise, that power would sit solely with Congress. The Commerce Department conducted an "investigation" into the issue and made basically the suggestions that the President is following. The national security angle has to be the issue at hand, otherwise he wouldn't have the power.

    The expanding authority of the Executive Branch is a horrible thing...however did anyone actually expect any differently? Democrats spent years bashing a "do nothing" Congress and pretending that somehow gave them a mandate in the Executive Branch to grab more power. Republicans cheer lead for Trump doing the same thing because hes politically generally in line with them.

    I recall making this comment on this very board, and being mocked for it:
    "Let's just be clear...it is the prerogative of Congress to do whatever it wants. If they don't want to confirm a nominee by the President they have no such obligation to do so. If they want to hold proforma sessions to prevent the President from being able to do a recess appointment that is also their prerogative. Ignoring this function of Congress, like President Obama actually did, and making an unconstitutional appointment resulted in the Supreme Court ruling against his actions.

    So what if Congress decides they are going to do absolutely nothing? That doesn't mean the President suddenly gets new powers because he is inconvenienced by the notion. Your attempt to justify the actions are made more comical by the FACT that the Supreme Court has already slapped them down."

    The underlying issue at hand here is actually that we all only seem to want to constrain the power of the President when they do something that we don't like - but the only result of that is an Executive Branch that just expands its power unchecked. It's no secret I'm a Republican and I hope (but am not overly optimistic) that Congress puts a stop to nonsense like these tariffs.
     
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  5. PLC1

    PLC1 Moderator Staff Member

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    I'm afraid you're being overly optimistic, but I hope you're not.

    1962? The increase in executive authority really goes back that far? It's high time we reeled it in. We should have done so several Democratic and Republican administrations ago.
     
  6. Old_Trapper70

    Old_Trapper70 Well-Known Member

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    Under current law Congress granted to the President the power withdraw from certain trade agreements as well as to impose tariffs on nations engaging in unfair trade practices, or when it is in the interest of national security. It is not unlimited, and Congress can overrule such action, but under specific circumstances.

    As to the expansion of executive powers, that has been going on for decades as has the powers of Congress:

    http://www.ushistory.org/gov/7a.asp
     
  7. PLC1

    PLC1 Moderator Staff Member

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    and relative to the power of the other two branches, the executive branch seems to have been increasing its power for, as you said, decades. There is a reason why the framers of the Constitution created a balance of power: Power corrupts. We, the people, allow this to happen at the risk of liberty.
     
  8. Old_Trapper70

    Old_Trapper70 Well-Known Member

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    http://www.libertylawsite.org/book-review/america-has-gone-wobbly/

    This might interest you too:

    https://www.theatlantic.com/magazine/archive/2017/09/how-america-lost-its-mind/534231/
     
  9. PLC1

    PLC1 Moderator Staff Member

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    Your first link describes Trump and how and why he rose to power pretty well. The increasing power of the presidency just makes his success that much more frightening.

     
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