Economy And Trade: The US Government Must End its War on the American Economy
As US Assigned-designate, Katherine Tai finds herself in a dilemma: The most important country will have to pressure it to open its markets — the core of USTR’s work — in the United States. If possible, you are reassured in a new role, Tai will face many challenges.
The protective measures taken by the Trump administration have taken USTR away from its mission statement “to open up markets around the world to create new opportunities and a higher standard of living for families, farmers, producers, workers, consumers, and businesses.” Instead of opening up markets, the result of the trade war was to block market access, reduce economic opportunities, and lower living standards.
There are a lot of prices that need to be refunded. By selecting a few “winners” — a handful of industry executives who wanted to defend themselves in the race — Trump’s team also created a large set of “winners” — businesses and consumers who need or prefer certain imported products.
U.S. businesses and consumers have suffered from high prices and reduced selection on a wide range of imported items including solar panels, washing machines, metal, aluminum, olives, whiskey, wine, cheese, yogurt, and aircraft, and taxes on hundreds of different products from China.
The term “economic well-being” refers to the entire standard of living and prosperity in a society. Tai will want to follow the lead of economists who have argued for decades that economic well-being is always improved when deductions are made. This can be illustrated by complex mathematical evidence, but can also be explained in a logical way to non-economists.
Aluminum provides a useful image. About half of the aluminum used in the United States is produced locally; the other part is imported. As the 10% tax on aluminum comes into effect, imported and domestic aluminum prices increased, which is a common market response to reduced competition. American aluminum manufacturers have benefited from getting higher prices on 50% of the market they use.
However, companies that buy aluminum to make high-value products pay for the recommended price for 100% domestic use. The additional cost of 100% of the market is much higher than the profits earned by US manufacturers, so the whole economy is in trouble. Tariffs make our country poorer.
The ravages of the Cold War have had immeasurable consequences. As of September 2020, the Tax Foundation reports that prices have cost Americans $ 80 billion in additional taxes and reduced employment by 179,800 jobs. The American Action Forum calculates the increase in consumer spending from high prices to $ 57 billion a year. This economic downturn will continue unless Biden’s management withdraws prices.
Then there is the enormous cost of international revenge for the ill-treatment of the United States. Much of the foreign political crisis is exported to the United States. A few of them are roasted coffee, motorcycles, sleeping bags, toilet paper, iron, aluminum, bourbon whiskey, beans, pork, cheese, and apples. Using the 2018 data, the Congressional Research Service has determined that more than $ 97 billion in exports to the US face new limitations.
The Tax Foundation estimates that retaliation has reduced US employment by 30,000 jobs. Significant job losses due to US prices are partly explained by the fact that almost half of all imports work like factories. Factories across the country have had to accept this unnecessary increase in costs, thus creating less competition in terms of consumer purchases.
It is difficult to thrive as a producer when the government is doing all it can to increase your costs. Tai gave an idea of his role: “US trade policy must benefit ordinary Americans, communities, and workers. And that starts with knowing that people are not only consumers — but also workers and earners.”
Let us hope that the benefits of “ordinary Americans, communities, and workers” will quickly end the trade war and allow consumers and sellers the freedom to do business around the world. In fact, we are involved in a seemingly endless trade war waged by the US government against the American economy. Ending it will honor the USTR’s stated goal of creating “new opportunities and higher standards of living” for Americans.
Originally published at https://www.timeup.xyz.