Tuesday, June 12, 2018

Who started the Trade War?

If you listen to the media you probably think that for no good reason Trump is trying to put huge tariff barriers up and is hell bent on wrecking the US economy.

The reality is that Trump is simply responding to a Trade War begun decades ago by countries like Canada and China.

Canada for example has tariffs of nearly 300% on US dairy products to protect their dairy industry. Which is fine so long as fake eyebrow wearing Canadian politicians don't say it's wrong for the US to put a 25% tariff on steel and aluminum from Canada.

Similarly China puts, on average, a 9% tariff, not counting VAT taxes, on products entering China while the US puts an average of less than 2%, and no VAT taxes.

What has been happening is that Americans have been subsidizing foreign companies for decades and Trump is saying that we're not going to continue to do that.  Back when Europe was recovering from their abject failure in WWII and Japan was recovering from the disastrous consequences of its imperialism America helping out made sense.

But it's time for the Europeans to put on their big boy pants and pay their own way.  They don't want to do that since they can't support their massive welfare states without US subsidies.

Think of it this way; you make it possible for the French to take long summer vacations by working hard and buying French goods.  Shouldn't they start paying for their own vacations?

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