us experts: "america first" is shooting itself in the foot
2024-09-24
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reference news reported on september 23on september 19, the british newspaper the times published an article titled "america's turn to protectionism is full of contradictions" by ryan byrne, an economist at the cato institute. excerpts from the article are as follows:
presidents trump and biden have both actively ridden the wave of protectionism. economists have denounced these “america first” actions as shooting themselves in the foot. trade barriers not only increase prices for consumers, but also stifle competition, undermining productivity and innovation. trump and biden have ignored them.
policy isolation and confusion
biden could have reversed trump’s tariffs, but he has gone further in some areas, raising tariffs on chinese “green” goods (such as solar panels and electric vehicles) and imposing export controls on artificial intelligence chips and manufacturing equipment. biden’s enthusiasm for industrial subsidies is equally unbridled, vigorously supporting manufacturers in the us semiconductor and green technology industries. the result? a tangled mess of government intervention, resulting in a us trade policy that seems increasingly isolated and chaotic.
what is the ultimate goal? trump initially justified tariffs as a way to force negotiations on “unfair” trade deals, while biden framed his tariffs as a defense against foreign threats. but it is now clear that both see protectionism as a panacea: one that will create high-paying manufacturing jobs, strengthen national security, and ensure america’s dominance in cutting-edge technology. trump even claimed that tariffs would solve america’s trade deficit problem. yet these goals often conflict with each other, and protectionism itself hurts.
for example, trump initially imposed tariffs on steel and aluminum, citing concerns about "national security," raising the cost of using these metals for american manufacturers, thus hitting manufacturing jobs hard. economists estimate that these tariffs may have saved about 1,000 jobs in the steel industry and 1,300 jobs in the aluminum industry, but eliminated 75,000 jobs in downstream industries such as construction, automobiles, and heavy machinery. worse, this move triggered a large number of companies to apply for exemptions or request to use tariffs to protect themselves, causing greater losses to the economy.
not beneficial to oneself
if reducing reliance on china is the main goal, neither trump nor biden has seized on the obvious alternative: trade more openly with democratic allies and source goods elsewhere. instead, trump’s tariffs have alienated key partners such as the european union and japan, and his new proposal to impose a 10% tariff on all imports could exacerbate discord.
biden is overly concerned with the legitimacy of such actions. despite his talk of “friendly shoring” (i.e. building supply chains with u.s. allies), he has failed to rejoin the comprehensive and progressive agreement for trans-pacific partnership, a strategic agreement that would have limited china’s influence in the pacific. in fact, his administration has abandoned efforts to reach free trade agreements, even with allies such as the united kingdom, and instead has pushed for buy american and industrial policies that smack of beggar-thy-neighbor protectionism.
part of the argument for selling protectionist policies is that they ensure future u.s. leadership in artificial intelligence, semiconductors, and other cutting-edge industries. but even here, u.s. policy often works in the opposite direction. the biden administration is dragging big u.s. tech companies to court with ambiguous antitrust lawsuits—not a recipe for becoming a global tech leader. biden’s export controls on high-tech chips, while intended to hit china, will also hurt u.s. companies by blocking their access to a huge market. blocking china’s direct access to chips would effectively force beijing to invest more subsidies in localized production and deepen trade ties with other countries to circumvent u.s. restrictions. whether this is ultimately good for the united states is debatable.
it is inevitable to suffer the consequences
in any case, biden’s protectionism is clearly not just about national security issues in special cases or promoting the development of emerging industries. last week his administration cracked down on “de minimis” exemptions that allow americans to import small amounts of goods, such as clothing, duty-free. raising the price of t-shirts will not help american companies beat china in the development of artificial intelligence. it will only make clothing more expensive for ordinary families, and perhaps help low-wage industries like textiles that have long since passed.
if biden ignores these trade-offs, trump simply ignores them, suggesting that tariffs won’t be painful. he says foreign exporters are footing the bill, ignoring the overwhelming evidence that american consumers and businesses are shouldering most of the costs. he touts huge windfall revenues, glossing over the billions of dollars in bailouts american farmers will need after retaliatory tariffs were imposed during his term, and the logic that you can’t import less if you want to generate decent revenues. economists roll their eyes when he says tariffs will shrink the trade deficit.
whether it is biden or trump, they are selling americans a false hope that their protectionism can solve various economic and social problems. they deny the impact of high prices and long-term costs on the potential economic vitality of the united states. an american commentator said: since 2016, tariffs have led to the loss of manufacturing jobs in the name of "saving jobs", alienated allies in the name of "decoupling from china", and raised the prices of daily goods in the name of "helping workers in difficulty". if trump wins the next election, more such paradoxes can be expected, and they will be more serious. (compiled by tu yi)
