A simple look at history tells us that not only is economic protectionism a good thing for America, but that it has been the historic position of the Republican & Whig Party, going all the way back to the Founders of the nation.
They believed that political independence could only be built upon economic independence, and that domestic industries must be protected from foreign competition, so that they could be nurtured and grown.
U.S. Trade Balance – Past 120 Years
George Washington signed the Tariff Act of 1789, making it the Republic’s second ever piece of legislation.
He believed that in order to be free, a nation needed to have its’ own industry:
A free people ought not only to be armed, but disciplined; to which end a uniform and well-digested plan is requisite; and their safety and interest require that they should promote such manufactories as tend to render them independent of others for essential, particularly military, supplies…
Alexander Hamilton believed that “despite an initial “increase of price” caused by regulations that control foreign competition, once a “domestic manufacture has attained to perfection… it invariably becomes cheaper.”
Alexander Hamilton’s system of instituting industry protections, tariffs, and other protective walls around American industry came to be known as “the American System“, and was further developed long after him by Henry Clay and US President Abraham Lincoln, during the period between the 1860’s and the 1940’s, “when the US became the planet’s leading manufacturing economy behind a high wall of tariffs”.
I do not know much… but I know this… when we buy manufactured goods abroad, we get the goods and the foreigner gets the money. When we buy the manufactured goods at home, we get both the goods and the money.
President Teddy Roosevelt believed that protectionism directly caused economic prosperity:
“The country has acquiesced in the wisdom of the protective-tariff principle. It is exceedingly undesirable that this system should be destroyed or that there should be violent and radical changes therein. Our past experience shows that great prosperity in this country has always come under a protective tariff.“
“Under free trade, the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man.”
While some disingenuous traitors claim that America only implemented tariffs to generate revenue and not to protect industry, in reality the opposite is true.
While it is true that tariffs were an important source of revenue in the early years of the Republic, as can be seen from the quotes above, the Founding Fathers believed in protecting domestic industries as a matter of principle, not simply for its’ revenue-generating capabilities.
George Washington advocated protectionism for independence, not for generating revenue.
Abraham Lincoln advocated protectionism for retaining capital domestically and not allowing it to leave the nation.
William McKinley promoted protectionism because he believed free trade was a form of slavery.
Roosevelt recommended protectionism in order to achieve prosperity, not to raise money.
George Washington was a protectionist. Alexander Hamilton was a protectionist. Abraham Lincoln was a protectionist. Teddy Roosevelt was a protectionist. William McKinley was a protectionist.
President Donald Trump is simply following in the path of the original patriots of this great nation. He is returning us to the principles that made us great.
The history of America is a history of building and maintaining an economic wall around the nation’s industry. The past 50 years of breaking down those walls is an anomaly and a veering off of our original path.
There are several major benefits to protecting domestic industry with import quotas, tariffs, and barriers to foreign entry:
- Capital remains inside the nation, and continues to circulate, with multiplier effects
- Capital spent on goods flows to American companies and American workers, enriching them, instead of foreign companies and foreign workers
- Domestic industrial companies remain strong and virile in the event of a national emergency or war
- Quality control is much more tightly controlled and overseen by US government
Some of the initial tariffs imposed by the United States were in response to a foreign nation intentionally flooding the country with superior goods at cut-rate prices, with the explicit intention of driving American businesses into bankruptcy.
In the aftermath of the War of 1812, Britain embarked on an explicit path of economic warfare against the United States, with the goal of keeping them dependent on British industry.
When a foreign nation cheats economic rules by aiding its’ domestic companies in flooding foreign markets, the target of the attack is guaranteed to die unless its’ government steps up to protect them. It simply cannot compete at that cost level.
The young American Congress responded to this act of economic warfare by building a wall of economic tariffs around their manufacturing industry.
While some have said tariffs are only suitable when an economy is developing, the truth is that tariffs and barriers to foreign entry must permanently and eternally stay in effect.
The minute the tariff walls are lowered and broken down, the nation becomes susceptible to dumping, subsidization by a foreign hostile power, and domestic manufacturing industry withers away and dies.
Manufacturing went from over 30% of all jobs in the United States to under 10%.
The minute politicians in the United States lowered the tariff walls and began to lower costs for its’ foreign competitors, they began to kill literally millions of jobs within their own country, accelerating dramatically with the admission of China to the World Trade Organization.
America lost 5 million quality, high-paying manufacturing jobs with the span of less than 10 years:
Tariffs and trade deals are not temporary measures, but conditions that must remain permanently in place in order to protect industries. There is never an appropriate time to remove tariffs or lower the cost of entering the American market, as US politicians did for China during the Bush period.
The wisdom and knowledge of the American founders contrasts greatly with the many major figures within the Republican Party currently attacking President Donald Trump over the small tariffs he is placing upon washing machines, solar panels, steel, and aluminum.
Understanding the history of the American Republic, it becomes clear that Trump is a man cut from the same cloth as the Founders, while people like Orrin Hatch, Ben Sasse, Pat Roberts, Mike Lee, Ron Johnson, & Paul Ryan, are small, simple-minded impostors with no knowledge of history or economics.
It has always historically been Democrats who believed in ultra-low or non-existent tariffs, commonly known as “free trade”, despite the decades-long data showing that free-trade nations generally performed worse economically than protectionist ones.
Looking at the history of the United States trade balance, an obvious trend appears, with a clear starting point:
Canadian trade deficit over 20 years – Financial Post
The logic is simple: by erecting economic borders around a country, the nation was essentially subsidizing the creation of companies within its’ borders, and thus JOBS. Applied across all industries, the cumulative effect of these policies would be the creation of tens of millions of JOBS, and not only jobs, but stable, consistent jobs that would not be in danger of overseas outsourcing.
The benefit to the nation would be the creation and stable maintenance of a large supply of well-paying jobs and an extremely strong manufacturing sector capable of supplying the country with all its’ needs. The downside, if there was one, was that products would initially be more expensive.
From the free trade perspective, the benefit was cheaper goods, while the downside was the loss of tens of millions of jobs, thus creating an entire class of unproductive, unemployed, stagnant workers.
Which would you rather have? A thriving domestic economy with slightly more expensive goods, or a stagnant, jobless economy, with slightly cheaper ones? The answer seems extremely clear.
We are meant to compete within our own nation against each other as a people and a labor force. We are not meant to compete with a Chinese slave working in a sweatshop 16 hours a day, living in a room with 10 people, and eventually leaping to his or her death from their prison factory.
The major media corporations have done an extremely good job perpetuating the myth that free trade is a Republican position, when in reality even the most cursory look at history shows that not to be the case. In fact, protectionism has been the Republican position since the founding of the nation, while free trade has always been a Democrat position. This means that the nation has essentially adopted Democrat policies for the past 50 years and Donald Trump is attempting to return the country to founding American and Republican policies.
China intentionally floods the global market with its’ steel products. If the US attempts to protect its’ domestic steel industry from China by implementing tariffs, China deceptively re-routes its’ steel through another country, such as Vietnam, South Korea, or even Canada.
In an interview here between Commerce Secretary Wilbur Ross & Bloomberg, the corporate media mouthpiece openly lobbies for a Canadian exemption. The question Ross could have easily asked was, “how much steel does Canada produce?”, which would have immediately embarrassed the corporate mouthpiece, as the answer is zero.
Canada imports all of its’ steel from China, and then sends finished product to the US.
It is honestly remarkable that major corporate media figures openly advocate for China loopholes to exploit the world trade system and actually think the American people or President Trump are stupid enough to not see what they’re doing.
If President Trump is successful in erecting economic borders around the country, the impact is easy to predict: investment will come flooding into America and an explosion of job creation will occur. The fact remains that 90 million Americans remain unemployed and out of the labor force. Regardless of the good news seen in the stock market, the American economy in 2018 is not that good, and in fact could be many, many times better.
Protecting domestic industries is not simply the right thing to do for economic prosperity, it’s the right thing to do for national security. China currently manufactures over 10 TIMES more steel than the US, with America’s production declining year over year.
If the trend continued and China ever entered into a military engagement with the US, it could simply stop all steel shipment to the United States and win any war. This is such an obvious notion that it is surprising Senators Hatch & Sasse have not been tried for treason yet.
It is really quite remarkable that political figures, commentators, and actual industry leaders in other nations are openly threatening President Trump & America with increased tariffs. The United States is the creme de la creme of economies and is desired by all. It is the market all producers wish to sell in. Trump holds all the cards. Either they do not understand what type of a man he is or they have simply grown used to abusing and exploiting the United States.
It is always humorous to me that the esteemed socialist and communist nations always need the capitalist US to sell their slave-labor products to, while we don’t need them for anything. I personally would be OK with 75 or 100% tariffs on foreign nations and we produce everything ourselves. The economic boon in millions upon millions of high paying jobs would vastly outpace whatever increased costs trickled through to product prices.
Now Europe is threatening the US with high tariffs, in addition to the high ones already existing. The reaction from these stagnant, putrid socialist economies is almost laughable. They would lose any “trade war”. America’s economy is only going to become more and more vibrant, nimble, and reactive, while Europe’s economy is crippled under enormous regulations, taxes, and bureaucracy. Trump is simply exposing the truth that many of us know already – the delusional European bureaucrats who sneer at America need the US for economic prosperity, not the other way around.
The risk comes from the potential ripple effects.
Affected countries may well retaliate by ordering tariffs on American goods, and they could carefully target goods to cause economic or political pain. American exporters — whether they sell passenger airplanes or soybeans — should be nervous about the next shoe to fall. There are few winners in an all-out trade war like one that enveloped the world economy in the 1930s.
In particular, the Trump administration’s invocation of national security concerns could set a precedent in which China and other nations are willing to use national security as grounds for tariffs, hurting the ability of the World Trade Organization to arbitrate disputes.
The real risk isn’t that steel and aluminum are a bit more expensive, though that is likely to be the case. It’s that an entire system of global trade, which the United States helped build, might be undermined.
Think carefully about what exactly the NYT is threatening as a consequence here: that foreign nations will buy less from the United States, and that the WTO will lose power to control American trade policy. It’s such a remarkable admission I find it difficult they could write it with a straight face.
America loses 800 billion dollars in wealth every single year. Gone. Wealth generated by the American people that leaves the nation and enriches other countries. There is literally no downside if other countries stop buying from us. They already don’t buy from us. That’s literally what having a trade deficit means. It means we are buying way, way, way more from foreign countries than they are buying from us.
Fundamentally, Donald Trump understands that at the end of the day, this is about wealth, capital, and where it is flowing to. Right now, roughly 800 billion dollars in wealth generated by the American people is flowing out of the country and into hostile foreign nations, funding the rise of their militaries and expansionist aims.
Trump is attempting to close the leak. He is attempting to stop that capital from leaving the nation. He understands that we are getting poorer as a nation the more this continues.
Americans continue to spend money on cheap foreign goods, but they no longer have the good, high-paying, manufacturing jobs to fund their buying sprees. It is no coincidence that the debt in America has exploded.
We are literally running up our credit cards, converting that to cash, and exchanging it with the Chinese Communist Party for cheap trinkets. Think about that for a second. We are bankrupting ourselves, helping China become a dominant military power, and all so that a toy at Walmart will be cheaper.
Think about that next time a Chamber-of-Commerce purchased US Senator gets on TV and frets about Walmart losing profits.
The decision by the President to impose tariffs means America will automatically stop buying goods from other nations, and instead purchase those goods from domestic companies. That automatically decreases the trade deficit with foreign nations. It is ludicrous when a foreign nation that has been taking advantage of America threatens to retaliate – they can’t retaliate because they are the ones who have been reaping the benefits. Any change in the relationship short of increasing the trade deficit benefits the United States. We literally have nothing to lose.
What we are witnessing across the media and corporate industries is many people who were receiving a free ride through exploitation being told that the free ride is over, and throwing a massive temper tantrum and threatening Armageddon because it is all they have. Their only last hope is to threaten Armageddon and hope they could apply enough pressure to change Trump’s mind. It is certainly a large public relations campaign, and against any other traditional Republican President, it would certainly work, or he would compromise and carve out “exemptions” for nations such as Canada, which import Chinese goods anyways.
But they don’t really understand who they are up against. They are going up against a titan of industry with a backbone of steel. And he is exposing the fact that, short of their loud media megaphones, they are basically powerless. He is pulling back the curtain and showing the world that they held their power through sheer media bullying and not much else. He is showing the country that when you simply ignore the media tantrums, they are totally impotent.
And the threat that China will stop buying goods from America? That is so laughable it’s difficult to believe they actually had the gall to state it. China sells 500 billion dollars more of goods than they buy from the US. They buy nothing from America. It literally can’t get any worse.
To summarize, the NYT says that China (-$500 billion trade deficit) will buy less from the US, other nations(-$800 billion trade deficit worldwide) will buy less from the US, the WTO (a non-state trade body) will lose the ability to CONTROL & DICTATE American trade policy to a sovereign nation, and somehow this all means… “an entire system of global trade is being undermined”.
It’s not just that the NYT is nonsensical, it’s that they outright lie, and that they are actually taken serious by people. What they really mean is America will actually defend its’ critical national industries and protect its’ jobs and people, and the NYT doesn’t like that. Now why would the NYT support foreign nations over America? That’s the endless question. Why did the NYT support Stalin while he was murdering his own citizens? Why do they essentially behave as traitors to the country?
It doesn’t matter, the only important thing to do is carefully note the fact that they are advocating on behalf of foreign nations, advocating on behalf of our enemies, and move on.