The nuts and bolts reality of our trade policy versus the trade policy of the fastest-growing economies
by Joseph Korff
China, Brazil, India and South Korea have protectionist trade policies regarding imported manufactured goods, and we have a virtually open-door policy to manufactured imports.
In some instances the tariffs imposed on our manufactured products by foreign countries exceed the cost of labor and materials used to make the product. A $25,000 car exported to Brazil has about $21,000 of tariffs applied to it by Brazil; $20,000 of golf balls exported to Brazil is hit with a $17,000 tariff. A $25,000 car shipped to India will cost about $75,000 because of Indian tariffs and taxes.
There is no way America can compete when tariffs of this magnitude are imposed on our products, but the tariffs keep those nations' economies humming along and our trade deficits and debts to them piling up with no end in sight.
Their method is simple: exclude imports and grow domestic jobs. This reality gives our lawyer-based Senate and Congress fits and classically trained economists sleepless nights, but it made sense to the former president of Brazil, who at one time was a machinist.
An interesting side note is that Brazil partially funds its social-security system on import tariffs. America should learn from the Brazilians.
The time to start an intelligent conversation about tariffs is long overdue. We need to get beyond the conversation in which the second and usually last sentence is, "We don't want to start a trade war." We are in a trade war, but we aim our guns against ourselves.