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USA goods could be more price competitive

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  • USA goods could be more price competitive

    USA goods could be more price competitive.
    Im among the proponents of a unilateral substantially market driven global trade policy as described within the Wikipedia article Import Certificates.
    If it were adopted by the USA it would almost, (if not entirely) eliminate USAs chronic trade deficits of goods; its would likely increase and never be a cause of decreasing USAs gross domestic production, (GDP). Trade deficits are a drag upon their nations GDPs and consequentially upon their numbers of jobs which in turn is a drag upon those wages purchasing powers.

    The policies entire additional costs are passed on to USAs purchasers of imported goods and those price increases beyond net direct federal expenses due to policy, are entirely due to markets behaviors.

    Unlike a tariff policy, the Imports Certificate policy at no additional cost to anyone, but due to those same market behaviors), would indirectly and effectively subsidize prices of USAs exported goods.
    Due to the import policies sensitivity to markets, it could not and would not prevent the importing of any item of goods for which theres effective USA demand.

    Unlike tariffs the policy would assure almost, (if not entire eliminating) USAs chronic annual trade deficits of goods; this assurance holds true regardless of how small of a price increase to USA import purchasers would occur due to markets.
    Tariff policies are dependent upon their tariff rates to accomplish their purposes. They could not provide assurances similar to Import Certificates unless their tariff rates were drastically high enough to threaten effectively eliminating USAs entire importing of foreign goods.

    Refer to Wikipedias article entitled Import Certificates.

    Respectfully, Supposn

  • #2
    How are import certificates superiour to traditional tariffs?

    As most know, I agree with our founders, or at least Washington and hamiliton(think it was hamiliton) that America has to have its own manufacturing to serve our own nation, for employment and national security and foundational strength. So we have to protect the source of national strength from lower wages overseas. So the tariffs were intended to be used to make up the difference in our labor costs and their labor costs. This principle is still valid, and is still basic common economic sense. We only got away from it to max out profits of a few of our capitalists who put their self interests above the most principled basic interest of America and her citizens. So free trade is a scheme which enriches a few while it weakens America, removing her independence and making her dependent upon others. Mostly slave labor.

    We have on behalf of these few capitalist elites, changed the way we look at trade. Trade should be about trade, for particular goods another nation has that americans want, French wine, English tweed, Morrocan leather, and then raw materials and even information. The goal is to run close to zero trade deficit and showing some surplus. But the mathematical certainty is this...not every trading partner can run a surplus, shocking, I know. Now if the gov't of that nation serves the nation and her majority of people, they will not endure trade deficits. For several reasons, but I will mention only one.

    When a nation runs a trade deficit, this represents lost jobs, which would exist if that deficit was seen as goods we could have produced, employing our own, keeping money here, but had to buy them from a trading partner. This is not good for a nation. But someone is benefitting from it, and it ain't the people who voted for trump and sanders. Yep, and that then tells you why we have what they falsely call free trade. But in selling this scheme the way we looked at trade was corrupted, to support the lunacy involved. Now trade can put a chicken in every pot and put more of them there than what our founders set up And it has proven out to be rubbish, for it contradicts common sense. If your economy is dependent on running trade surpluses you are creating unemployment with your trading partners. But of course we do not run surpluses. We run big deficits, which will with mathematical certainty give you unemployment, perpetual. This cost the taxpayers for people have to survive and we subsidized a few elites maxing out their own profits as it weakens this nation. Now the founders used tariffs to protect and preserve our economy and job creation engines, and it allowed us to rise up to be the most powerful and richest nation on earth, which testifies to its intelligence. And what replaced it has hollowed us out, weakened us in a plethora of ways, and gave us a change election. The scheme has been too costly and what could never be questioned, free trade suddenly could be questioned, by the people, and it put trump into office. Looks like the scheme is finally starting to unravel. And both parties will fight it. For we were told not to question it. Go get yourself some high tech education, fit for globalization, for the same work that your parents and grandparents did to earn a living wage, well we sent those jobs to people who are so poor they will do that job for 56 cents an hour, so you better learn to work poverty wages or get yourself a high tech education in a field that HB1 visas cannot do or a skill that cannot be done cheaper by someone in india. And this is what this scheme has created. It took away job security and jobs for our majority which tariffs kept in place. So anything that reverses this unhealthy insanity is good. .


    • #3
      The way to be more competitive is to compete. Artificial barriers discourage competition. This isn't the 19th century. We have the technology. We have the resources. We have the know how. We just get out of our own way. Cut the taxes. Repeal the regulations. Work cooperatively to clean the industrial processes instead of adversarially.

      Why Trade Restrictions Always Backfire

      When the U.S. imposed a tariff on magazine paper from Canada in 2015, workers at a financially troubled paper mill in Maine cheered. Less than two years later, their jobs are gone and the mill is closed.

      It wasnt supposed to happen that way. Tariffs, protectionists tell us, help the domestic economy, or at least certain industries. The truth is that restrictions on imports almost always backfire. By suppressing competition, they make domestic industries less efficient; they raise prices both on imports and the competing domestic products; they dont spur us to fix our own problems or products but instead, they make us sloppy; and they hurt consumers who face higher prices and often fewer choices.

      With so many people calling for tariffs or quotas or other protectionist restrictions on trade these days, perhaps were overdue to re-learn some important lessons.

      The Importance of Trade

      Why trade at all? If we really wanted to, we could behave like a national Robinson Crusoekeeping foreign goods out and making everything ourselves. But people trade because they want to acquire things that are cheaper or better or even unavailable at home. The fundamental principle of trade is that both sides to the transaction benefit or they wouldnt have traded in the first place.

      The most painful lesson in Americas trade history came in 1930. To combat rising unemployment at the start of the Great Depression, Congress and the President imposed the highest tariffs in a century. The thought was that if we made those foreign imports more expensive, then Americans would buy more domestic-made goods and thereby put people back to work. But foreigners retaliated by imposing tariffs on the U.S. A full-scale trade war resulted.

      Trade is a two-way street. Closing the door to imports closes the door to exports. If foreigners cant sell here, they cant earn the dollars they need to buy here. When the 1930 tariff caused Americans to buy fewer imports, foreign sellers stopped buying American goods. As a result, American agriculture, dependent then as now on exporting farm produce, suffered plummeting prices and huge losses in the 1930s.

      Americans last year imported about $2.3 trillion in physical merchandise. More than half of the total were not finished goods. Rather, they were raw materials, capital goods, industrial supplies and component parts for things like automobiles. Make all those things costlier through tariffs and you simultaneously hurt American industries that buy them. A tariff on foreign goods should be regarded as a consumption tax on Americans citizens and companies.

      What About Fair Trade?

      Foreign governments dont play fair, you say! Yes, others from time to time do impose tariffs on us. But retaliating in kind is liking cutting off your nose to spite your face. It just makes things more expensive to us.

      Yes, China has manipulated its currency to help its exports but does anybody think Americas central bank doesnt manipulate the dollar, as well as interest rates? And when China reduces its currencys value to help its exports, the flip side is that we get a lot of stuff from China at cut-rate prices that we can use to both save money and make our own industries more competitive. American automakers may not like cars coming from Japan but they sure like cheaper parts coming from China or wherever.

      Freer trade causes short-term issues and necessitates adjustments in production and employment, for the same reasons the automobile challenged the buggy industry. But imposing costs and barriers to trade creates problems of its own. Trade is, and always has been, a vitally important way to strengthen an economy and give choice to consumers.
      You can not have a free society without free trade.
      Last edited by Commodore; 01-24-2017, 10:13 AM.


      • #4
        I googled internet politic forum when I again encountered uspoliticsonline.
        I don't know why I haven't any Email notices of response to my post in this forum. Maybe I inadvertently deleted or lost it as junk mail?
        Respectfully, Supposn


        • #5
          Originally posted by Blue Doggy View Post
          How are import certificates superiour to traditional tariffs? ...
          Blue Doggy,

          Comparison of tariffs and transferable Import Certificate trade policys:

          Tariff rates are generally set by their government to provide some net tax revenue beyond the governments costs due to the trade policy. Importers of goods into the tariff nation are required to pay the tariff rate. The tariff rate and any other other market determined net costs are passed on as additional costs to the tariff nation's eventual purchasers of imported goods.

          An insufficient tariff rate cannot provide sufficient tax revenue. Only drastically high tariff rates are likely to entirely or significantly reduce its nation's annual trade deficits of goods. That purpose could not be reasonably assured unless the nation's purchasers of imported goods were required to pay extreme drastically high prices for imported goods. Due to such drastically high prices, only the very wealthy could afford imported goods.

          Import Certificate, (IC) fees set by the U.S. federal government would by law limited to government's direct net costs due to the trade policy; there is no net tax revenue due to a policy of transferable ICs. The IC fee rate and any other other market determined net costs are passed on as additional costs to the IC nation's eventual purchasers of imported goods.

          Any market determined net costs due to an IC policy serve as an indirect but effective price subsidy for USA's exported goods. This market determined and induced price subsidy is of no cost to any individual enterprise or person.

          Price increases to USA purchasers of imported goods that didn't fully reflect federal net direct expenses due to the IC policy would be unsustainable. But regardless of the proportional price increases to USA's purchasers of imported goods, an IC policy would significantly, if not entirely eliminate USA's chronic annual trade deficits of goods while increasing our GDP and numbers of jobs more than otherwise.

          Unlike a tariff policy, due to an IC policy's sensitivity to markets' behaviors, if there's an effective demand for any item of foreign goods, it would be commercially profitable to import that item.

          Respectfully, Supposn


          • #6
            Originally posted by Commodore View Post
            The way to be more competitive is to compete. Artificial barriers discourage competition. This isn't the 19th century. We have the technology. We have the resources. We have the know how. We just get out of our own way. Cut the taxes. Repeal the regulations. Work cooperatively to clean the industrial processes instead of adversarially.

            Why Trade Restrictions Always Backfire

            You can not have a free society without free trade.
            Commodore, annual trade deficits are always net detrimental to their nation's GDP. This is not an opinion but rather a fact based upon all of the what determines a nation's gross domestic production.

            The most commonly method of determining a nation's GDP throughout the worlds communities of economists and statistician is the expenditure method. But all generally accepted methods directly or indirectly reflect the nation's balance of trade as a contributor to the nation's GDP. Within all conventionally accepted methods for determining GDP, explicitly or indirectly trade surpluses increase, and trade deficits reduce their nation's GDP more than otherwise.

            Reduction of GDP reduces number of jobs, which in turn causes more reduction of GDP. During poorer or richer economic times, due to our trade deficits our GDPs and numbers of jobs were less than otherwise; otherwise being if our nation had not experienced chronic annual trade deficits of goods.

            I am not opposed to global trade, but we should not suffer trade deficits because we're blindly seeking pure free trade. Pure free trade is not a requirement for a free society or a healthy economy.

            Respectfully, Supposn