Because it gets into the nuts and bolts, Bacon’s Rebellion is not easy reading, but it does provide the satisfaction of learning something. Therefore, I visit from time to time.
“A Dozen Pockets of Extreme and Growing Risk” is one of several recent posts that focuses on the fragility of the economy. Naturally our trade war with China came up. So I left this comment.
The problem with any decision is that we have to evaluate the tradeoffs. Overall, when it comes to trade, free trade delivers the optimum tradeoffs. One-sided free trade, however, is not free trade. One-sided free trade allows one nation to manipulate the other nation’s economy.
Conservatives advocate free trade. We have become so committed to the idea that won’t even retaliate when another nation imposes tarrifs on our products and subsidizes its own. That’s tantamount to abandoning our most valuable industries to the tender mercies of foreign powers. The politicians who do that are either corrupt or foolish.
We want free trade? Then we have fight for it. Freedom is not free. (from here)
Generally, this blog doesn’t get economic issues, but a trade war of this magnitude is an extremely risky undertaking. Trade wars threaten the jobs families need to do all the things families do, and trade wars can lead to military conflict. So we have a conundrum. How do we defend our economic interests without imposing tariffs and provoking the Chinese?
Do we have a good alternative? Can we continue to ignore the problem? Doesn’t putting off the problem allow the Chinese to put us in a weaker position?
So has President Donald Trump chosen the best course of action? Let’s hope that he has. In addition, give our president credit for proper preparation. What has he done?
- He has built up our military strength. Since trade wars have history of assuming military dimensions, this is an especially wise move.
- He has strengthened our economy by getting rid of unneeded regulations and by lowering taxes.
- He has assisted U.S. industries under assault by Chinese tariffs.
- He has left the Chinese government an honorable out. He has proposed that we each play by the same rules.
How will this trade war turn out? We cannot foresee the future, but let’s pray the leaders of China will see the wisdom in negotiating honorably.