A Geek With Guns

Chronicling the depravities of the State.

With Friends Like the United States, Who Needs Enemies

without comments

A lot of people refer to Trump as a fascist. While he (along with almost every other politician) certainly displays a lot of fascist tendencies, I think it would be more accurate, at least economically, to refer to him as a mercantilist. His policies have been aimed at discouraging importing goods in favor of internal trade. While many people still believe that mercantilism is a sound economic policy, it wrecks havoc on international relations:

The US is to impose tariffs on steel and aluminium imports from key allies in Europe and North America.

The US said a 25% tax on steel and 10% tax on aluminium from the EU, Mexico and Canada will start at midnight.

The move immediately triggered vows of retaliation from Mexico, Canada and the EU, which called the tariffs “protectionism, pure and simple”.

With friends like the United States, who needs enemies?

Mercantilism falls apart because it discourages international trade. First one nation implements a policy that harms another nation. Then that nation implements its own policy in retaliation to harm the first nation. This cycle can continue until trade between the two nations halts entirely.

I know a lot of people believe that this will bring prosperity to the United States. However, if you believe that policies like this will bring back the good old days of the 1950s where a single factory worker could buy a house, truck, and boat, you’re sorely mistaken. Manufacturing is highly automated, which reduces the number of available factory jobs. Moreover, the regulatory red tape makes many economic activities such as resource extraction, resource refinement, and manufacturing cost prohibitive. In addition to all of that, the United States has been out of the game for so long that it lacks the experience and knowledge necessary to mass produce many desired consumer goods. Overcoming all of those issues will take a significant amount of time and even if they are overcome, the available market will be tiny because foreign nations will have already implemented retaliatory policies prohibiting trade with the United States (not having the biggest market in the world, China, available would itself strongly discourage manufacturing goods in the United States).

Written by Christopher Burg

June 1st, 2018 at 10:00 am