Tariffs are Bad MmmmKay?!
Hello there again readers and welcome back to Coffee Break Liberty, a blog where we tackle books, news and many other things under the sun where liberty is a guiding principle. If this is your first time here we would like to extend a special warm welcome to you and hope you enjoy yourself while here.
Here at Coffee Break Liberty we have discussed before how important free trade is and how it is one of the best policies to lift people from poverty, of course when paired with free market principles at home. When free trade is truly implemented it allows for nations that have an advantage in producing certain goods to take advantage of that in the market place, among other things. These advantages should not only be appreciated but also exploited. An example we have used before would be between the USA and Brazil, one has a clear advantage when it comes to producing things like coffee beans. It makes little to no sense at all for the USA to try and fight a natural advantage that Brazil has in producing coffee beans. Let them produce those beans while we in the USA produce something they would have a much harder time producing in Brazil. This brings us to the title of this blog post and the recent tariff slapped on Chinese solar panels that are being imported into the USA. Though China may not have a natural resource that gives them an advantage they have a cheap labor force that does give them that advantage.
We have discussed these kinda policies before here on Coffee Break Liberty, ones that are of a protectionist nature while in the end hurting the consumer. The last time this issue was written about we discussed the over 200% tariff laid on Bombardier, the link to that post is here. A 30% tariff is designed to make the Chinese solar panels more expensive thus making the US made panels more attractive, we all get that. What happens at the end of the line though is that the consumer ends up paying more for the solar panels and we are all worse off for it. The idea that this is great for American jobs isn’t true. Sure in the short term the jobs will be protected but this doesn’t help the economy move forward and we are left diverting segments of workforce over to a sector that if left alone would need to adapt and change or die off. Protectionist policies hurt the consumer and the economy. The worker at the solar panel firm is also hurt by this. He is left with the impression that his job is now safe, it isn’t. If you feel your job is safe now because of a government policy, find a new job. Thats some advice for those that feel this way now. Innovation always gets around government policies. Some may point out that a company from China now says they will open a factory in the US to build panels now and this pleases people for some reason. A Chinese company… to create jobs in America?… And profits for who?…. Why didn’t a US company do that?! Those that are all impressed by this Chinese firm moving a factory over here and now at all wondering why an American firm didn’t make the investment to open up another factory should be asking why the US firms didn’t. Perhaps they already saw it as a poor investment. These tariffs disregard the consumer and are intended to help protect a certain segment of the workforce. When the government picks winners and losers we all end up losing in the end.
One last bit of food for thought, keep in mind that the US government is now slapping tariffs on an industry that they are also subsidizing, granted more at the local levels but still. Why not just get rid of the subsidies then is the question?!
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Keep that coffee warm for us.
LWS
