Fair Trade or "Fair Weather" Trade?

I have never thought much about the nuts and bolts of trade. I have conflated "free" trade with "fair" trade. Recent "events" have caused me to realize that free trade is anything goes. Kind of like free love. As with free love, there are usually regrets (by at least one party).

Fair trade means what it says, a fair way of doing business. One country adds a 2.5% tariff on imported vehicles and their trading partner puts a 20% or a 50% tariff (tax) on the vehicles they import from their partner. Is that fair?

The US freely allows this to happen to themselves. I am not sure if it is guilt or what, but we certainly have been taken advantage of. I can see Trump's point. We (the US) do not put much of a tariff on anything (check this out: https://hts.usitc.gov/current)

There are 99 chapters to this document and if you take the time to look, you can see that it is extremely rare for an import tariff to exceed 5% let alone 10%.The vast majority of imports into the US are free of tariffs!. The US consumer benefits when there are no barriers to import trade, but if we import more than we export due to the fact that our exports are artificially way more expensive than the importing nation's domestic products, then is that fair?

These other nations who state, in a huff, that they will slap higher tariffs on our goods if we raise the tariff on steel are actually quite comical. If you had a 25% advantage in selling and suddenly lost that advantage, you would be upset, right?

One last thing. Much has been made about the fact that China provides only 2% of our steel imports and China seems to be the biggest object of Trump's scorn. Remember, China is dumping steel and aluminum on the ENTIRE world, not just the US. This depresses prices globally. Other nations respond by subsidizing their domestic industries, allowing them to sell at a similar, money losing price. We, in the US, do not generally provide direct support to our industries. (Yes, we can help with targeted tax policies and soft help like in marketing and other grants, but that is a drop in the bucket.) So, if we put pressure on the nations where we get 98% of our steel to pressure China to stop depressing the steel market, then maybe some good will come of it. (I doubt it because China doesn't really listen to anyone.) At least it might raise the price of steel back up to actual costs, right?

I think what Trump means by "if you want a trade war, we can win it" is that we have plenty of room to add tariffs to our imported goods without taxing more than our trading partners. We are a HUGE market for the rest of the world.

I, personally, do not advocate for a trade war, but the imbalance is there. Negotiating for decades (which is what these bureaucrats do) truly gets nothing done. Businesses and politicians normally want status quo. There is little uncertainty with status quo (THAT is what they are actually whining about... the uncertainty). The US is a very generous nation. You could think of our $850 billion annual trade deficit as additional foreign aid. Can we afford it? Maybe small nations need our "assistance" but does China, Germany or Japan?

Trump does things differently, no doubt, but he stirs things up and gets the ball rolling. More has been discussed and done about trade in the past week than probably in the past year. Let's see what happens and if the sky truly falls.

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