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Our domestic and international economic policies should improve not harm our standard of living.
Domestic economic policies that encourage the creation of low-paying jobs to compete internationally on price do not raise our standard of living. Placing higher tariffs on imported goods without wage increases to offset the higher costs of these goods does not raise the domestic standard of living; it does the opposite.
Tariffs also spark retaliatory tariffs.
As the cost of U.S. goods to foreign consumers goes up, U.S. overseas sales go down, hurting manufacturing and agribusiness and employment at home. Retaliatory tariffs also encourage domestic companies to set up shop outside our country, in order to hold on to their global sales revenue.
What, if any, alternatives to tariffs are at our disposal to improve our domestic economy and standard of living?
We could create income and capital gains tax incentives/disincentives to encourage domestic companies that produce goods overseas to bring manufacturing back to America.
Likewise, we could create non-tariff tax incentives to encourage foreign companies to manufacture goods in America.
And, if we become more competitive on quality and innovation, not just price, there would be more incentive to buy American at home and abroad.
Import quotas and/or bans, not tariffs, might also be worth exploring in order to stop “near-dumping,” encourage domestic manufacturing, and punish intellectual property theft.
These are less risky, potentially far more effective alternatives to tariffs.
Tariff wars à la Trump are not the solution. In the long run, they will harm national economies and standards of living, at home and abroad.
Maurice F. Baggiano, J.D., is a Jamestown resident and a published legal author, former adjunct faculty member at Gannon University in Erie and the Rochester Institute of Technology, and is a member of the Bar of the U.S. Supreme Court.