The impetus for imposing a tariff is the fact that we don’t live in an economy with a Job Guarantee as part of a Full Employment Fiscal policy. If we implemented a Job Guarantee, we wouldn’t need a tariff to keep folks working. But,
• The Job Guarantee jobs would probably provide lower value-added service jobs compared to higher paying heavy industrial jobs.
• Maintaining a high trade deficit is providing foreign folk a claim on our grandkids’ output. But why should they care who owns the capital (or has a claim on it) when they come into the world naked and ready to work. Why should they care who gets the output of their labor: a Chinese family or the rich guy in the town over. It doesn’t matter to them. (see blurb on Intergenerational Equity: The Kids are NOT Alright! The Truth about The Federal Debt and Intergenerational Equity )
• A tariff is a tax on everybody else. Why should everybody subsidize the few industrial workers and companies in steel/aluminum?
• It will also cause retaliation, and massive disruption in production/distribution with Canada and Mexico.
• If someone wants to send us cheap stuff, we would be crazy not to take it.
Right now we have the worst situation: high trade deficit, no Job Guarantee, resulting in low labor utilization –> unemployment/misery.
– Job Guarantee (see the blurb: Financing Economic Solutions – Job Guarantee ),
– High public investment in higher education (with an emphasis on STEM and trade schools) to maximize the level of people output, and
– Free Trade.