pcr explores tariffs;

The Tariff Issue

Paul Craig Roberts

The tariff controversy is being colored in the most scary ways possible, because the Democrats, media, and ruling establishment want rid of Trump. It is also important to understand that tariffs are not the only way to limit imports.  There are other means, such as quotas.  Quotas on imports into the US of Japanese cars were part of the US auto producers bailout negotiated in the final year of the Carter administration.

I will attempt to put the issue in a correct perspective.  It is not Trump’s intention, at least at the present time, to institutionalize a tariff regime.  Trump is using tariffs as a threat to secure agreements that he thinks are in America’s interests.  So far 50 countries have, according to reports, agreed to remove their tariffs on US goods.  The countries responding aggressively seem to be China and our European allies.  I explained yesterday how Trump could better have gone about his task.  Nevertheless, as the Commerce Secretary said, Trump’s tariffs are not expected to extend beyond a few weeks or a few months of negotiation.  

During this time there could be supply disruptions.  Apparently, Trump is aware and has released an 11-page appendix that exempts all sorts of imported items that US producers require to continue their operations.  Whatever disruption does occur, should be small compared to the Covid lockdown supply disruption, the basic cause of the current inflation. The Covid disruption was pointless and counterproductive.  The tariff disruption, if there is one, is the cost of establishing a fair and uniform trading system........more......