Former Governor of Massachusetts Bill Weld announced today he is running for president against Donald Trump, hoping to secure the Republican nomination.
Nickolas Roberson | United States
A newly published report by the Tax Foundation on the 5th of December has found that the Trump administration’s recently imposed tariffs on aluminum, steel, solar panels, and a plethora of other industrial goods from China will increase taxation on Americans by $42 billion.
A tariff, as defined by the said report, is “a type of excise tax that is levied on goods produced abroad at the time of import.” Their intent is to “increase consumption of goods manufactured at home by increasing the price of foreign-produced goods.” This pricing of foreign goods is artificially increased, as the government is taxing its citizens for purchasing and consuming products. Things affected are foods, such as bananas or rice, personal goods, such as televisions or furniture, or commercial goods that could be tractors, cars, airplanes, etc. Why? The governments of our world state that their intentions are to protect their domestic industries from the competition and “vices” of foreign businesses and companies. In reality, tariffs are further methods for big brother to increase his control over us, regulating our methods of voluntary exchange, what goods we trade, and by taking away our money in the form of extended taxation.
Regarding the Trump administration’s tariffs specifically, there will be a 25 percent tariff on imported steel ($7.3 billion tax increase), a 10 percent tariff on imported aluminum ($1.7 billion tax increase), 25 percent tariff on imported goods from China that have a total value of $50 billion ($12.5 billion tax increase), and a 10 percent tariff on $200 billion worth of other imports from China ($20 billion tax increase). Thus, as reported by the Tax Foundation, the overall tax increase will be near $42 billion on American citizens. Additionally, the administration threatened to implement another $129 billion worth of tariffs on more Chinese products and merchandise.
When analyzing the economic impacts of the President’s current protectionist tariffs, the Tax Foundation found that they would “reduce long-run GDP by 0.12 percent ($30.4 billion) and wages by 0.08 percent and eliminate 94,300 full-time equivalent jobs.” If the proposed tariffs are implemented as well, “long-run GDP would fall by 0.38 percent ($94.4 billion) and wages by 0.24 percent, and 292,600 full-time equivalent jobs would be eliminated.” It should be reiterated that tariffs are artificially increased prices of imported products and services by the government to discourage consumers from purchasing them. It is truly a form of taxation. No Chinese business or manufacturer is paying this tax, as the Trump administration continues to attempt to debate and establish.
Now, what are the origins of tariffs? For centuries, European nations practiced a trading system dubbed mercantilism, which attempted to prevent goods and services from leaving a home country, preventing trade value from leaving the said country. Incredibly high tariffs and other trade barriers were put into place, leading to high costs for manufactured goods and multiple trade wars throughout the world. However, in 1776, an economist named Adam Smith published his work titled Wealth of Nations.
This magnum opus regarding economics questioned the systems of mercantilism and proposed the idea of free trade: an economic theory that promoted competition between businesses and individuals across a global scale, voluntary trade without regulations such as tariffs, and no discrimination against imports or exports. As this new idea spread across the globe, nations and its citizens experienced a rapid flow of commerce, development of economies, and increases in productivity and innovation. The practice of the aforementioned theory was so successful. Organizations such as the World Trade Organization, NAFTA, and the European Union were developed to continue to promote its benefits to the human race.
Unfortunately, President Donald Trump and his administration seem to be ignoring this history of free trade and its plethora of benefits. With their tariffs, both current and proposed, competition will be stifled in the economy of the United States, resulting in higher prices for goods and services; jobs will be lost, GDP will fall, and the overall economy could possibly become a bear market. The next question that must be asked: will these tariffs counteract the benefits of Trump’s deregulation plan, with it increasing the economic freedom and reducing the regulatory costs of the nation? Furthermore, when will this expansion of government end? When will big brother stop raping and pillaging people for their capital and assets to pay off its own enormous debt? Only time will be able to answer this question, but one thing is obvious to the naked eye: the future of the United States of America is a foggy and obscure one.
71 Republic is the Third Voice in media. We pride ourselves on distinctively independent journalism and editorials. Every dollar you give helps us grow our mission of providing reliable coverage. Please consider donating to our Patreon, which you can find here. Thank you very much for your support!
By Dane Larsen | United States
“It is better to be defeated standing for a high principle than to run by committing subterfuge.” -Grover Cleveland
On March 4th, 1885, a new President was inaugurated. One fresh face of a politician, who had only 3 years of experience in politics prior to being elected to Commander in Chief. Being the Mayor of Buffalo for 11 months, then the 28th Governor of New York for just over two years, Grover Cleveland brought many new ideals that alligned with the late-19th century American public.
Whether known for his rough around the edges attitude, or serving two terms as President, just 4 years, many people forget that much of the shrinking of government in wake of the 20th century should be credited to Grover Cleveland. After his first term, he was beat by Benjamin Harrison, a GOP candidate who was in office for 4 years, and messed up almost everything Cleveland did from 1885-89. From raising taxes on every tax bracket, to enforcing protectionist tariffs, or furthering the US’ involvement in Imperialism, Harrison was anything but Libertarian. So, in an effort to bring prosperity back the White House and D.C., Cleveland ran again in 1892, and won the election to be President for another 4 years, until he stepped out of power.
If anything, Cleveland is known for his “no nonsense” laissez-faire economics, combined with scaling down the size of government in all aspects, but in domestic finance policies primarily. He was known and recorded to have vetoed hundreds of crazy spending proposals, including omnibus budgets, enormous pension expansions, and needless capital boosts on the military’s power. Following through on his campaign promises, he also brought the national debt down, when it was still on the rebound from the Civil War.
Cleveland was a notable fighter against tariffs. In an address to Congress of 38 states at the time, he stated “it is indefensible extortion and a culpable betrayal of American fairness and justice”, to enact such taxes on goods that in all, hurt the American economy. He studied economics independently, as he only foresaw an Elementary education, yet he was up at the top of the class when he was admitted to the New York Bar in 1859. During a time where the idea of tariffs were gaining traction from the misinformed, and uninformed, Cleveland stuck to his word, vetoing double digits of tariff bills in office.
Lastly, the 22nd and 24th President of the USA was a firm believer in the gold standard, rather than a government-backed central bank which manipulates money at the general public’s expense. Shortly after he was inaugurated for the second time, there was a brief Depression that ensued over the United States, prompted by the failure of a railroad being built. Over one million Americans lost their jobs, and just under 400 banks closed. Cleveland overturned a Compromise bill that forced the use of silver in the monetary policy, passed by Benjamin Harrison before him. This gave the US a more sound economic position both domestically and in the world economy.
Cleveland was also a strong opponent of the Imperialism movement of the late 19th century. While he fought against intervention into the Congo specifically, he also believed in the sovereign rights of states around the US. He believed that land shouldn’t be governed from far away, much like the Founding Fathers, and he proved this when he refused to annex Hawaii and other Caribbean colonies.
During his Presidency, Cleveland did use force to try to get his way in Latin America. Despite his lacks views of foreign policy and isolationism, he did have strong opinions on countries trying to intervene in the colonial puppets of Central and South America. When Great Britain tried to set up their Imperialist powers in countries like Jamaica, Honduras, Barbados, etc., Cleveland insisted that he spread military power to the regions to resist this imperialism. He did so with Congress approval, but he overstepped his boundaries, some say, to impose his own views on other governmental powers.
While the last act of aggression can be passed off because of its good intentions, the Scott Act of 1888 is inexcusable. During the heart of Chinese Exclusion of the United States, the Scott Act “prohibited Chinese laborers abroad or who planned future travels from returning”. Much of what we see in the Protectionist movement in modern day America, both the Republican and Democratic parties in the late 1800’s were for limited immigration and semi-closed borders. According to the Department of Homeland Security, this denied access to between 20-30,000 potential workers.
Cleveland’s views on rugged individualism and unalienable freedoms were more of the same, aligning with many of the libertarian-type people in power. Whether it was supporting state’s rights, the Bill of Rights, and autonomy from the state, Cleveland is much like Ulysses S. Grant, Warren G. Harding and other Libertarian Presidents of members of Congress who pushed liberty. Differently than his predecessors, however, Cleveland appointed his government employees by experience and knowledge of the job itself. By committing to a meritocracy, the POTUS set up a necessary precedent for the government to avoid nepotism, or anything of the sort.
Cleveland hits a speed bump here, where he gave in to the times he was born into. The Dawe’s Act is where Grover Cleveland signed into law, a bill which turned over a lot of the remaining American Indian land, back to the government. It divided up the tribal land between the population of Native Americans, and the rest would be surplus, open for the white man. This broke apart the tribal structure and culture. Another fault in his Presidency was during the Pullman Strike, where Cleveland broke apart a Union of railroad workers with governmental force. He used the military and police departments to threaten with strength against this strike. Because this was a cause of concern for the general public, Cleveland intervened.
He had a short list of flaws, but some may not be looked over without batting an eye. Grover Cleveland did, however, align himself with a lot of modern libertarian beliefs, and did more good than harm in office.
To support 71 Republic, please donate to our Patreon, which you can find here.
By Kaycee Ikeonu | Canada
In a 1978 talk, the great economist, Milton Friedman, famously stated that tariffs protect consumers from one thing: “it protects the consumer against low prices!” Friedman, of course, could not have been more right, but his words are ignored with today’s trade wars and tariffs.
Such words of wisdom are essential today amid harsh criticism of free trade from the Trump administration. Some of these critiques include that the United States is losing jobs overseas to countries like Mexico, that the United States has large deficits compared to her trade partners, and most significantly, the need to protect steel and aluminium industries in the United States from going out of business.
An in-depth economic rebuttal of all of these proposals exists. Yet, it is not fully necessary, as the basic rules of economics outline the clear benefits of free trade. Adam Smith, in his famous book, The Wealth of Nations, declares it perfectly. It is in people of any nation’s interest to buy whatever they want from whomever sells it the cheapest.
This is a concept that could not be easier to grasp. When people buy products at lower prices, they then have more money to spend on other goods in the economy.
Now, let’s take a case that is about to happen: The U.S. imposes a tariff on Chinese imports, and now China threatens to put a tariff of $60B on U.S. goods. So, who benefits? The American economy? The American and Chinese consumers now pay a tax on goods. Without the taxes and subsidies on both sides, both countries would strengthen their economies. But instead, they are resorting to subsidizing the hurt regions after hurting them in the first place.
Thus, very few people benefit from this policy. Perhaps, exceptions exist in a few big manufacturers and the ego of the President of the United States.
To support 71 Republic, please donate to our Patreon, which you can find here.
By Indri Schaelicke | United States
Over the past week, much confusion has surrounded the future of the US-China trade war that Trump has moved to start. Just a few days ago, all signs were pointing toward a de-escalation of trade tensions as both China and the US seemed ready to come to the table to make a deal.
But only 2 days later, it appears that the US will be starting this trade war after all. On Tuesday, the Trump Administration announced it would enact 25 percent tariffs on $50 billion in imports by June 15. The White House will also announce investment restrictions on Chinese purchases of U.S. technology two weeks later. The administration’s inability to present a clear, coherent plan threatens the stability of the market as people speculate about the future of America’s trade policy. Over the past 5 days, the stock price of America’s largest steel producer, Nucor, has fluctuated between $62.50 and $64.50 as instability rocks the steel market. People are unsure about the fate of steel prices and are hesitant to invest in the steel industry.
Beyond instability however, there are several other issues that protectionism fails to consider. Tariffs are put into place in an effort to protect domestic companies and workers from competition from abroad. By placing import tariffs on Chinese products, the Trump administration is hoping that they can promote increased purchases on American produced products. The administration is specifically targeting protecting the steel industry, but the tariffs imposed will affect a multitude of others.
Take a look around you and notice how many things you use everyday are made of steel. The device you are using right now to read this article contains steel components. The car you drive, the tools you use, the appliances in our homes, all have important steel parts. Tariffs on steel will drive up the price of American steel and make it more difficult for companies who create products with steel components to price their own products at an affordable price. When a cost of an input in production rises, so does the final product itself. Steel tariffs will impact many industries and jack up prices across the economy.
Throughout his campaign, Trump was committed to protecting American jobs and making it a global economic force. His solution of imposing protectionist policies is not one that will lead to the greatest economic growth. Rather than isolating the US and hurting our economy, he should be looking to expand it and make it competitive in the global markets.
President Trump has already enacted large scale regulatory reform, a move that will surely help the economy boom. The corporate tax cuts introduced and signed in December 2017 have also reduced the tax strain on corporations and given them greater ability to invest and build their business. Enacting protectionist policies will only reverse the good being done for the economy.
Instead of driving up the prices of US products, which will decrease our net exports as other nations cannot afford our goods and services, Trump should aim to do just the opposite- steps should be taken to lower production costs and therefore lower the costs of final goods and services. Tariffs and other protectionist policies hike up the prices of our goods and services and make them unable to compete in the global economy.
Reducing barriers to trade is one simple way to decrease the cost of production of goods and services in the US. If the White House embraces free trade, it will see America prosper and little loss of jobs.
Support our work by donating to our Patreon, which can be found by clicking here.
Featured Image From Google