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Unhappy with China, Trump takes his anger out on US – Publications – AEI

Summary:
AEI Unhappy with China, Trump takes his anger out on US That’s the title of John Tamny’s recent article in Real Clear Markets, here’s a condensed version: President Trump confirmed last week he plans to impose tariffs on billion of Chinese exports to the U.S. Translated, Trump raised taxes on the American people by billion. [MP: Actually Trump will impose a 25% tariff on billion worth of goods from China, so the tax increase would be more like .5 billion.] Up front, Trump’s actions are problematic. This simple truth can’t be repeated enough: the country most open to the world’s plenty is the country whose people are most advantaged. The latter is true when we consider why people get up and go to work each day: it’s to get things in return for their work. Nothing could be

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AEI
Unhappy with China, Trump takes his anger out on US

That’s the title of John Tamny’s recent article in Real Clear Markets, here’s a condensed version:

President Trump confirmed last week he plans to impose tariffs on $50 billion of Chinese exports to the U.S. Translated, Trump raised taxes on the American people by $50 billion.

[MP: Actually Trump will impose a 25% tariff on $50 billion worth of goods from China, so the tax increase would be more like $12.5 billion.]

Up front, Trump’s actions are problematic. This simple truth can’t be repeated enough: the country most open to the world’s plenty is the country whose people are most advantaged. The latter is true when we consider why people get up and go to work each day: it’s to get things in return for their work. Nothing could be simpler. Our work is an expression of a desire to “import” from either next door, or from some producer thousands of miles away. To work is to demand things, and this is true even if the worker saves every dollar earned. To save is merely to shift demand to others, and the shift of demand capacity could be to borrowers, children, grandchildren, favorite charities, or businesses that the saver invests in. The main point is that production is always and everywhere an expression of demand.

Considering the above in terms of Trump’s actions vis-à-vis China, he’s raised the cost of work. Though he’ll defend the tariffs as an attempt to protect “American jobs,” the reality is that every American will pay for Trump’s faux attempt at compassion. Indeed, assuming any jobs can be saved thanks to the tariffs, what Trump forgets is that there are 330 million Americans. And whether they work or not, their capacity to demand is an effect of work. By definition. In short, Trump is harming every American worker to protect a microscopic percentage of workers. Sadly, it gets even worse.

In slapping tariffs on Chinese goods, Trump is creating yet another revenue stream for the federal government. A government that already spends $4 trillion per year to the economy’s detriment, will get an extra $50 $12.5 billion. The taxes raised will give the feds even more control over the economy’s resources, including greater control over the most important economic resource of all: we, the American people.

Forever unseen will be the companies never formed, the individuals never employed, and the life-changing advances that will not be funded so that Trump can strike at China. You see, in taxing our work and our ability to specialize, Trump is making sure to injure us in a third way through increased tax collections. All to allegedly harm China….

MP: You might be a protectionist if you think you can create wealth, prosperity and jobs by raising the cost of working and harming every American worker to protect a microscopic percentage of workers.

You might be a protectionist if you think it’s a good idea to tax Americans with tariffs and transfer billions of dollars from the private sector to the public sector.

You might be a protectionist if, like Trump, you’re unhappy with China and you think it’s a good idea to take your anger out on your fellow Americans with higher taxes, increased government revenues, higher prices, less choice, less competition, and fewer jobs.

Unhappy with China, Trump takes his anger out on US
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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