CampeadorIt's funny really, when you provide sources that prove my point. The Fed uses the U3 unemployment metric, which is very misleading in terms of the true employment situation in the US.
Your article would suggest that tariffs, implemented by Obama to protect domestic tire producers from a concerted Chinese dumping effort to destroy the US tire manufacturing industry, did in fact work. Yes consumers, across the whole economy, paid 1.1 billion more for tires, but it fails to mention how much money was preserved within the US economy, and not sent off to China. It also fails to mention the economic benefits of keeping members of the US tire industry employed, and the fiscal benefits of not needing to provide government benefits to these people had they become unemployed as a result of Chinese dumping.
Now, if a tariff had not been implemented, the US tire industry would have been severely damaged. The goal of Chinese manufacturers is to undermine and destroy US manufacturers through dumping efforts. Once these manufacturing industries are destroyed, we're then fed the lie that "Americans can't compete" and "Americans can't manufacture", which is absolute bullshit.
China has been manipulating its currency for years. You want to talk about "basic economics"? If you do not understand how currency manipulation affect the balance of trade, you obviously have not gotten very far.
http://www.washingtontimes.com/news/2015/nov/13/madison-gesiotto-negative-effects-chinas-currency-/?page=all
Here, read the article linked inside.
https://www.piie.com/publications/pb/pb12-9.pdf
It saved 1,200 jobs. Yippie. We, the consumers, spent about $1b for 1,200 jobs. Not really a great trade off is it? What I am about to present is EXACTLY what I said would happen with a trade war. Let us begin.
First: "The cost per job manufacturing saved (a maximum of 1,200 jobs by our calculations) was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire
workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home."
Want to know what China first did in return?. They raised tariffs on chicken imports. "The Chinese tariffs reduced exports by $1 billion as US poultry firms experienced a 90 percent collapse in their exports of chicken parts to China."
Now, remember that I also said the American consumer would deal with higher prices. Here we go:
"Chinese-made unit values
increased from $30.79 to $38.92 per car tire between 2009Q3 and 2011Q3—representing a 26 percent increase in the post-tariff era...Over the safeguard period, Chinese-made light truck tire unit values
increased from $52.73 to $61.48 between 2009Q3 and 2011Q3—representing
a 17 percent increase during the post-tariff era. The average unit value of US light truck tire imports from AOC
increased from $76.20 to $89.64 between 2009Q3 and 2011Q3—an 18 percent increase during the post-tariff era...Multiplying 3.26 percent by the approximate value of US-made tire sales during the post-tariff period ($18.1 billion in 2010), we conclude that the larger post-tariff spread
cost American consumers $590 million on an annualized basis.
And HERE WE GO! THE KICKER
"The tire safeguards
extracted an estimated $1,112 million annually from US consumers; at the same time, the
safeguards put $48 million in the pockets of otherwise unemployed tire workers. The net effect was to
reduce consumer spending on other retail goods by about $1,064 million, indicating that the safeguard
tariffs probably cost around 3,731 jobs in the retail sector."
GOD PROTECTIONIST POLICIES WORK SO FUCKING WELL.
Christ. Read a real piece, not something from a Criminal Law writer.
http://www.wsj.com/articles/the-myths-of-chinas-currency-manipulation-1452296887
