Candlemakers vs. the Sun

Basquiat poked fun at protectionist trade policies by pretending to petition on behalf of French candlemakers for an end to the importation of below-cost sunlight.  The only flaw I can find in his argument is that we can't see any plausible way one of our trade competitors can cut off our sunlight after we come to depend on it.

Lately, if I understand the President properly, he's taken to saying he'd actually prefer zero tariffs, and is imposing tariffs only to show other countries the cost of the ones they impose on us.  Is this really like saying we should shut out the sun because other countries are doing the same to themselves?

Whether this really is a flaw in the President's economic theory or not, however, it does seem as though the strategy can work.  Trading partners do respond to the threat of tariffs, sometimes, by agreeing to moderate their own.

6 comments:

douglas said...

He's a negotiator. He sees, rightly, that in the past, we negotiate pretty much everything with one arm tied behind our backs, because there's no political will to do things like what Trump is doing now. Our competitors know this and take appropriate advantage- I don't begrudge them this- it's natural, and how the market works. I think this has a reasonable chance at working. I'm pretty sure our opposition are pretty surprised and aren't ready to deal with this as much as they'd like to be. Surely they have serious market vulnerabilities that Trump can use as leverage.

Grim said...

A simple standard of zero tariffs for those who will do us the same courtesy means no need for massive international trade organizations like the TPP or T-TIP would have enacted. So much less potential for graft.

Dad29 said...

A rather sophisticated commenter (on another site) made the point that the tariff schemes of the USGummint since WWII have been neatly-disguised foreign aid. Makes sense if you look at the recipient countries; we've 'taken care of' Germany, Japan, Mexico, and to a lesser extent, Canada.

And after the ChiComs paid off sufficiently, Clinton put them on the Most Favored Nation status. Of course, that wasn't foreign aid; that was payback.

Might be interesting to trace Big Money investment timing in those "aided" countries vis-a-vis those tariff deals, eh?

douglas said...

Of course, Grim, that means you have to be willing to have tariffs on those who would tariff you. I think Trump understands well how complexity can be used to mask benefits for the selected.

David Foster said...

Abolition of formal tariffs would not eliminate 'non-tariff barriers'....it is hard to imaging any treaty language that could effectively ban the use of regulations to discriminate in favor of home producers. There are zillions of ways that creative regulation-writers can write rules....safety rules, health rules, standards, etc...that are neutral on their face but in effect discriminate against some producers in favor of others.

douglas said...

OF course. For convenience sake, I think we're using "tariff" to mean most of any of those things. Realistically, I don't think you can get rid of all of them, but that's not to say that the balance of those things was out of whack and some aggressive moves might allow for negotiating things back down a little. Of course the very fact that you can never eliminate these things means you have to every once in a while, show that you're paying attention and won't let things get too far off keel.