US Trade War Ramping Up

Posted by Jason | Posted in Economics | Posted on 30-12-2009

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This is why government should not be involved in markets. In order to cater to their union backers, the government is launching a trade war. Don’t these idiots know that is a big reason for the Great Depression? Oh yeah, I forgot unemployment doesn’t effect elected officials. What do they care?

We were just mentioning how screwed the West will be if in fact the world goes go into “trade war” mode.

Well, here we are. The US International Trade Commission has just sided with US steelmakers in favoring duties on Chinese imports. Their bulletin is here.

via And Just Like That, The US Amps Up The Trade War Against China.

Trade wars are liking pointing a gun at each other’s head and both deciding to pull at the same time. It only harms both sides.

Also, it’s basically a subsidy from the general population to the protected group. Ultimately, the public will have to pay more for products made with steel, so that steel workers can keep their jobs. The result is less prosperity for the rest of us. In addition, there will end up being another group harmed when China decides to retaliate against some other industry.

Oh yeah, and say bye to the little guy. Only the big businesses can afford the increase in material costs. I have a friend who made mattresses. He was able to compete with the big boys, because he got a lot of his materials from China and was able to keep margins low. Then some lobby group got to the government and had them raise prices on something to do with springs. The cost drove his prices up to where he could no longer compete with the big boys. Less than a year later, he was out of business. Now, while the group that was protected may have keep jobs, he lost his business, and his employees lost their jobs. Also, the market no longer has the low cost mattresses he was able to deliver.

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