Even though I learned about tariffs back in my Problems of Democracy class (taught by Bill Zwarych) I had to look up the definition of tariff. As usual, I found a lot more than I wanted know so here’s hoping what I have to say here doesn’t do the same to you. Basically tariffs are taxes on imports and exports. There are reasons for them and reasons against them.
Tariffs began in the Spanish town of Tarifa when they charged ships to use their docks. The first tariffs were usually used to protect a native industry. The folks in Tarifa didn’t charge locals, but the ships from out of town provided Tarifa a higher standard of living.
So some folks might think tariffs are a good thing because the best taxes are the ones that someone else pays. But then again, when another country can sell us a cheaper product than we can make here doesn’t everything that has an import tariff on it cost you and me more? Could it be that the price of this nationalist (MAGA) movement will be funded by you and me?
As Lee Fleischer knows, math has never been my forte so he might want to check mine here. If you impose a 25 percent tariff on imported steel to protect 140,000 of our steelworkers won’t that increase the costs for the 6,500,000 workers in the steel manufacturing business? Won’t that also increase the costs of new construction, roads and bridges and such? I have to wonder how much of that much touted tax cut we got will be left once our trading partners reciprocate.
My research indicates that once one country imposes a tariff on another country in order to make up the loss the other country imposes a reciprocal tariff on the other — it’s called a quid pro quo. So what pro quo should you and I worry about around here?
Oil will be all right, but agriculture could get hammered hard. Since all of us have to eat there’s nowhere in the world that doesn’t need mass quantities of food and since we raise more food than we can consume the world’s markets are a critical factor to those of us out here in farm country.
The detail here is that we are no longer the only country that exports food. For instance, I’ve been told that a lot of our beef comes from Argentina, which is hard for those of us out here in ranch land to swallow. The reality is that competition in the world market for agricultural commodities is rather stiff. For instance, Mexico recently decided to go south for its corn rather than put up with the political crap they’ve recently had to endure from us. Corn’s a big crop here and I’ve heard some nasty remarks about the price of corn. By the way, our third-largest trade partner, Mexico, imports a lot of corn.
For those of you worried about a global economy, you’re late, it’s been around for quite some time. The benefits of creating tariff-free zones (European Union, NAFTA, CAFTA, etc.) have been ingrained into our economy for a long time and, even with all the complications, these tariff-free zones seem to have worked quite well and most likely it’s also made the world more peaceful.
So the good side to tariffs is that they might preserve an industry, but nothing’s free, so you and I will pay more than we are now for the same things, so I’m against them. But I do have to give the president credit, he is following through on his campaign promises, and for the record that’s why I didn’t vote for him.