Washington’s Unwise Trade War Against China

It boggles my mind sometimes. The ABQ Journal’s Winthrop Quigley asserted in this recent article that “the Obama administration has yet to increase taxes on anyone despite the president’s objections to the Bush tax cuts.” The article in general is blog-worthy because Quigley seems to be saying that “taxes don’t matter” as they relate to economic growth, but I will focus here on the tax issue. Did Quigley completely forget about Obama’s massive tobacco tax hikes? Most of the impact of these tax hikes, by the way, impact low income taxpayers.

But this isn’t a tax policy post, I’m talking trade war here. Of course, tariffs are simply a tax placed on imported goods. So Quigley is wrong again. The Obama Administration earlier this year levied a 35% tax on Chinese tires.

Now, the newspaper is reporting a third likely tax hike, this one on pipes used in the oil and gas industry and imported from China. Oil and gas being an industry of particular importance to New Mexico, I’m sure that our own New Mexico congressional delegation will stand up to the Democratic Party’s staunch allies, the United Steelworkers and support this vital home grown industry (yeah right!) against this tax hike.

Anyway, perhaps someone who hasn’t published a letter to the editor in the Business Journal in the past week can alert Quigley to these tax hikes? Hopefully fiscal conservatives will unite in opposing this dangerous trade war as well.

Happy New Year!

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6 Replies to “Washington’s Unwise Trade War Against China”

  1. I find this attitude to be a very short sighted and knee-jerk libertarian. I used to be a Libertarian. It was an easy formulation of thought but needs more intelligent application.
    Our Country has had a drastic loss of its manufacturing sector in recent history. China, Japan and many other countries practice very similar market protection while we have chosen to become unilaterally disarmed with respect to trade.
    If “cheap” is our goal, look at what Chinese drywall has cost us. Do we wish to add gas line leaks to this problem?
    I hope you don’t remind me of all the jobs we will gain from the pipe inverters sector growth.
    N.M. has, for instance, rare earth minerals which aren’t mined since we buy cheaper from China. The silly windmills it goes in are assembled in Mexico.
    I think that if you question every Obama move, you’re moving in the right direction. If you are against every piece of trade impediment without regard to the give and take of international trade you are not a Libertarian but a trade pacifist helping our country lose business and jobs.

  2. Free trade should always be the preferred means of doing business however most countries impose some kind of impediment thus fair trade should be our objective. The most common obstacle is the value added tax (VAT) which is added to every American export when it arrives in the destination foreign country. Also when foreign country exporters send their products abroad they get a credit for any VAT paid for products they export. Since America lacks a VAT we will always be at a disadvantage.

  3. I actually view Perry’s numbers, 4.9 vs. 4.3 Trillion, as being somewhat alarming regarding our manufacturing health. Of course, the more important figure would be this data’s rate of change.

    According to the International Monetary Fund, the U.S. went from producing 32 % of the world’s GDP in 2000. Now we produce 24 %.

    25% – 33% of our manufacturing jobs have gone away in that time as well.

    We sink, they rise.

    We need to at least balance with the rest of the world’s tendency to protect their countries. The VAT, according to Mark R is an example.

    I meant to spell “pipe inventors” in my sixth sentence. My point was that if we rid ourselves of manufacturing we won’t survive doing just design and invention. It just doesn’t create enough jobs.

    The end state of this game of sending manufacturing to the site of the cheapest worker is for the U.S. worker to have a very low standard of living. We cannot all be doctors or lawyers and, unless you think like Obama, we cannot all be government workers. We will all end up flipping burgers and changing bed pans.

    Obama’s world vision is for America to share in the experience of living the rest of the world’s standard of living, third world included. He and the Democrats are in what I call the poverty industry, better known as socialism. What they are doing is effectively creating an American bubble of poverty for them to lord over.

    Bush fell into the “the more free trade the better” trap a well.

  4. May I suggest that Perry’s numbers may have included the output of goods made in China by American owned companies. This wouldn’t count as American manufacturing in my book. Other economists claiming the health of American manufacturing do this very thing.

    To be a conservative is to rely on proven systems. As desirable as it is to buy cheap goods produced in foreign lands by poorly paid people, when we give up our means of production for such a dubious arrangement we make ourselves poorer.

    “The causes of wealth are something totally different from wealth itself. A person may possess wealth i.e. exchangeable value; if, however, he does not possess the power of producing objects of more value than he consumes, he will become poorer. A person may be poor, if he, however possesses the power of producing a larger amount of valuable articles than he consumes, he becomes rich.”

    — Frederick List – early mercantile theorist
    quoted in an article entitled: The Fallacy of Free Trade

    We cannot be a country of corporate headquarters and R&D labs. We need to keep our manufacturing sector growing and not shrinking as it really is.

    As I used to say when I worked in at Los Alamos,
    “Just as one cannot live by bread alone we can neither live by research and design alone.”

    Our country needs to carefully examine this world wide trend towards progressive corporatism and world socialism. China, still run by a communist dictatorship, may one day be our mortal enemy. When that time comes we will not want to be using the inferior screws, nuts and bolts that currently break in the hands of American workmen daily, to build our weapons.

    For a good primer on progressive corporatism read:

    Thank you and I apologize for having been a bit hot headed in my first post.

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