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Economics-A-R

12 Apr

Many people think that President Trump is recklessly using tariffs to protect American jobs but do not realize that money talks. After World War II, America dominated the manufacturing market. Factories throughout Europe, in both Allied and Axis countries were devastated by the war but factories in America were untouched. America had produced most of the war materials for the Allies and quickly switched to producing domestic goods. Money flowed into the US to purchase goods not available in Europe and Americans prospered. As Europe recovered, they imposed high tariffs on American goods to protect their own manufacturers and demand for American goods dropped. For many years the United States has been very lenient in international trade. We have opened our borders to cheap foreign goods by keeping tariffs very low or non-existent. Yet other countries have imposed high tariffs which have discouraged their citizens from purchasing American goods. As a result,  it resulted in the decline of American manufacturing which could not compete with the cheaper foreign goods, resulting in money and jobs flowing out of America. In addition, our manufacturers moved plants and jobs to Mexico where they could produce products cheaper and ship the products back to the US to sell. Personal and national debt has mounted as we have shifted from high paying manufacturing jobs to low paying service jobs. It also poses a threat in an emergency. We saw how dangerous that was when the planes hit the twin towers and later when Covid hit and we closed our borders. We were heavily dependent on foreign goods and suddenly they weren’t available. After Covid, we could not get medicine and medical equipment which we had depended on China to supply, since it was no longer produced here.

 

 

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