Free Trade?


About 100 years ago American industrialists were able to get the U.S. Congress to wage heavy tariffs on most imports.  But with the advent of a world economy that sort of thing fell into disfavor.  People wanted to be able to buy things that were not produced in the U.S. at reasonable prices.  Additionally, the U.S. wanted to be able to sell goods in world markets without foreign government interference.   This worked until around 1980 when world markets redefined themselves.  It is also when Japan became a world leader in markets the U.S. had formerly dominated, electronics and automobiles.

For the American consumer, at least until now, that has been a good thing.  American companies who made inferior products to those produced in other countries, either had to step up or be put out of business.  We can see the result of American industrialists not meeting the challenge when Chrysler and General Motors would have gone belly up had it not been for a huge infusion of government funds.  GM shed a number of its cars, Pontiac, Oldsmobile, Saturn, and Hummer, so that it could better focus its advancement of its other brands, and, at least at this point, they have done well.

The U.S. used to be the world’s largest exporter of steel but now imports much of its steel.  Why?  After World War II, America’s steel companies failed to modernize their plants, and foreign nations, such as Germany, were more efficient in the steel making process which in turn allowed them to produce cheaper steel.

Since the mid-1990s, however, a new economic power has entered many world markets, China.  Unlike other industrial nations, the Chinese government subsidizes their industry.  To wit, the U.S., the technological leader and until recently leading producer of electric generation through wind power, has suddenly fallen on hard times.  The heavily subsidized Chinese products are far less expensive than their U.S. counterparts.  This, I submit, is exactly where a heavy dose of tariff is called for.

But there are any number of very powerful U.S. corporate interests that would challenge such a tariff, complaining, maybe rightfully, that it would hinder their ability to sell their product on the Chinese market.  One such corporation is Ford Motor Company which has recently built its 7th plant in China.  They would almost definitely holler that any tariff would comprise a restriction of trade, and claim such to be illegal.

While I sympathize with Ford, I believe there has to be a compromise found to level the playing field.  Some will make the cry that this is a case of isolationism, proposing new tariffs.  But at some point it is the job of our government to protect U.S. corporate interests against unfair trade practices such as the Chinese are pursuing.  It is not reasonable to expect that the emerging renewable energy companies can even stay alive, let alone compete, when they are asked to go it alone against a government such as China.

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