A Return to Tariffs in the United States Makes Sense



Tariffs are essentially a tax
on imports or exports between nations. Their goal is to protect manufacturing and
that’s more than timely as America no longer manufactures what it did in the
times before such free-trade agreements as NAFTA.
As
a bit of a primer, consider our background in tariffs:
Alexander
Hamilton (America’s first Secretary of the treasury) explained that despite an
initial “increase of price” caused by
regulations that control foreign competition, once a “domestic manufacture has
attained to perfection… it invariably becomes cheaper.”
George Washington
signed the Tariff Act of 1789, making it the Republic’s second ever piece of
legislation. Increasing the domestic supply of manufactured goods, particularly
war materials, was seen as an issue of national security. Washington and
Hamilton believed that political independence was predicated upon economic
independence. (Wikipedia)

Those who champion free trade
argue that it has lifted hundreds of millions out of poverty and they are right. One need only glance in
the direction of China, whose growth has maintained a remarkable 8% rate over
decades, creating a viable Chinese middle class. 
But the cost of that has come at the decline of our own middle class, as we subtly transferred our
economic activity from producers to consumers.
Televisions,
automobiles, washers, dryers, computers and toasters may all be improved and technically perfected, perhaps even invented  in America, but they are
uniformly produced elsewhere. The
most inventive and creative society on the face of the earth off-shored its
manufacture, essentially trading its profit
base
for consumer markup.
We
Americans Wal-Marted ourselves into a race to the bottom, touting cheap imports and congratulating ourselves all
the way to the poor-house
. It’s a chimera, a grotesque product of the
imagination to watch our industries flush themselves down the toilet while jobs
are lost, boom-towns become derelict and decades (even centuries) of prosperity
become a mere footnote, a sad history. 
The cost to the American Dream, if that dream is to flourish rather than wither,  is simply not payable. Nor, I will argue, is it equitable to emerging economies.
The clincher to this
argument, if such a thing can be fairly argued, is that we have done a great service
to the poor of this world and it’s now time to turn the prosperity project over to others. I therefore nominate China. 
China,
the world’s most populous nation, has built itself a solid middle class
and I congratulate them for it. But there is a responsibility that comes along
with that economic miracle. That responsibility is to grow up and carry the torch we lit for them with our free-trade
policies.
China
has a solid, consumer-ready middle class of 600,000 citizens. America has a
population of 323 million, half of whom consider themselves middle class.
That’s 160 million against China’s 600 million and it doesn’t take a
mathematician to see that their number is close to four times ours. 
Why do you
think American business is so eager to participate in their economy?
Yet along with that growth in
consumers, China is slowly being undercut in the world labor market by poorer
countries. And that’s a good thing. That’s key to my argument and the natural and irresistible way for the
world to lift itself out of poverty. Nations become rich and become consumers, just as we have.
Poorer nations become rich supporting those new consumers and the cycle
repeats. It’s both logical and sustainable.
More than that, it’s China’s
turn at the wheel.
A
gradual return to targeted tariffs will not take us back to storied and
long-gone times. Everyone with a brain realizes that turning back clocks has
never worked. But basic economic strategies are not at all out of date and
America, no matter its deficit in middle class numbers, is still the largest
consumer nation on earth.
More than that, it’s
America’s turn at that wheel. 
Once
emerging economies realize that growth
through low labor costs comes first, logically followed by growth through catering to their own internal markets with tariffs,
we will have proven a sustainable cycle
that truly does lift all boats.


America
cannot lift the entire world without destroying itself. Gradual tariffs
will close the circle of sustainability and leave a template for others
to follow. Over time, China will hand off the baton to India in a race to the
top rather than an inevitable spiral to the bottom. That metaphoric baton will
continue to be handed off from nation to nation.
Anything
less will simply continue to exploit the world’s currently poor nations.
Trickle-down was a failed and fraudulent theory. 
We
owe it to our inheritors to reverse the gravity and trickle-up.

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