Tariffs May Eat America’s Lunch

Trans-Pacific Partnership

The Trans-Pacific Partnership is inked. The US isn’t part of it, of course. Instead the government took the opportunity on the same day to impose new steel tariffs. No one benefits when the US refuses to cooperate with its trade partners.

One day two wanderers on the sand encountered an oyster the water had washed up. They gorged on the oyster with their eyes. Pointed it out to each other. But, when it came to the eating, well that was contested.

One was already reaching down to pick up the prey, when the other pushed him and said,

It’s best to know which of us will have the joy of consuming. The first who saw the oyster should be the swallower. The other can watch.

If that’s how we’re going to decide the business, his companion replied, then I have the good eye, thank god.

Mine’s not bad either, the other said, and I saw it before you, on my life.

Fine, you saw it, but I smelled it.

During this lovely conversation, Perrin Dandin arrived. They took him for their judge. Gravely, Perrin opened the oyster and, as the two men watched, he popped it down his throat. His meal done, he said, in a presidential tone,

Here, the court gives each of you a half shell. No legal fees. Now go on home in peace.

Calculate how much it costs to litigate today, then count how much is left to most families. You’ll see that it’s the Perrins who keep the money for themselves, and leave the litigants holding the bag with barely a leg to stand on.

In theory, we protect ourselves with tariffs. In practice, we let the lawyers and economists who bill the hours devising the tariffs eat oysters, while the rest of us pay higher prices.

In a world of increasing globalization, international trade barriers become ever more bizarre relics of the past. When we dig beneath the reasoning for a tariff, we find an arcane calculation that purports to re-establish some sought-after, supposed equilibrium, but ultimately benefits the most powerful lobby and punishes the less enfranchised.

We’ve been calling that democracy for lack of a better word. Let’s call it what it is: isolationism, cronyism, self-dealing, nativism, even xenophobia. There are a lot of descriptive possibilities. What it is not is “protectionism”, if that term is taken at face value. As in, protecting the people who elected the government. For every factory worker whose job is protected by a tariff, there’s always another whose job is put in jeopardy. And the tariff removes all hope of achieving a stable balance, because it is an artificial stimulus. Sure, cocaine will give you boundless energy for a while, but it’s not your friend for the long haul.

It is in all our best interests to achieve global economic stability. Yes, that dream is a long way off. But initiatives like the TPP bring it one step closer to reality. Whereas heavy steel tariffs mean some special interest groups will get a few juicy slithers topped with hot sauce down their throats, and the rest of us will be left holding the empty half shell.

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