By Mark Anderson
As Donald Trump heads back to the White House, he has named former Rep. Pete Hoekstra (R-Mich.) as ambassador to Canada, and Howard Lutnick as Commerce secretary. Both men favor stronger emphasis on tariffs to protect the U.S. industrial base, nudge the economy toward greater national self-sufficiency, and increase federal revenues from something besides intrusive income tax filings.
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If Trump boldly follows through on his plan to slap tariffs at the U.S. border, then trade spats and higher-priced imports would be a transformational speed bump on route to a more protected industrial base, more secure, higher-paying jobs in the longer run, and a more economically autonomous nation with the healthier U.S. manufacturing sector providing a sound tax base to finance local schools, police, fire, ambulance, streets, water and sewer.
Lutnick, who is CEO of the well-connected financial services firm Cantor Fitzgerald—one of 24 primary dealers authorized to trade U.S. securities with the New York Federal Reserve branch—proclaimed at Trump’s recent Madison Square Garden rally that America’s economic history, around the banner year of 1900, was characterized by the absence of a federal income tax and the presence of tariffs, which were the federal government’s chief revenue source.
We never get an objective look at tariffs. Neither the legacy media cartel nor the financial mandarins running the global financial and trade system will tolerate such a discussion for even a nanosecond. All we ever hear is tariffs will make foreign-made parts and goods more expensive for U.S. consumers, and that tariffs will ignite a trade war.
It has bordered on blasphemy to inquire whether tariffs should become a larger source of revenue for our federal government, or for any national government, compared to relying on personal and business income taxes. Woe to anyone who dares to suggest that sufficiently large tariffs discourage companies from closing down their domestic operations and outsourcing to another country, because the owners know that paying the tariff will erase the savings they had hoped to realize by seeking an external haven with cheaper labor costs.
Few people remember GM executive and outstanding free trade analyst Gus Stelzer and his book The Nightmare of Camelot: An Exposé of the Free Trade Trojan Horse. Stelzer wrote then what almost no one mentions today: Mainly, that all taxes, not just import tariffs, make things cost more—directly when the cost of individual and business income taxes, among other levies, are passed on to the consumer; and indirectly when paying an income tax reduces business profits and workers’ disposable incomes to spend on various supplies, goods and services, mom and pop shops, luxuries, etc.
PROFESSOR RAPS TRUMP TARIFFS
“If we impose a 10% tariff, other countries are going to have a hard time selling stuff to us because the prices are going to be higher, and people in the U.S. are going to buy less,” Texas A&M economics professor Dennis Jansen stated, mimicking what everyone else has been stating. “So, there’s a chance we could get into a tariff war, which is us raising ours to 10%, and them raising theirs to 10%; the government revenue will go up, but international trade will decline.”
That sums up the central goal of instituting sizable tariffs: To indeed reduce international trade, generate new revenue, and eventually reduce over-dependency on other nations for a whole host of raw materials and products, especially with regard to strategic metals and minerals for defense needs.
For the record, goods imported into the U.S. under Trump could be subject to tariffs of 10% to 20%, with an additional tariff of up to 60% on Chinese goods. And if Mexico doesn’t cooperate in stemming the flow of illegals, Trump has suggested a tariff on imports from Mexico between 25% and 100%. Those figures are obviously speculative for now.
Yes, these are high figures, perhaps a bit too high. And, yes, if actually implemented, they will make imported things cost more. Tariff retribution, or a trade war, may ensue along some trade avenues. Yet shouldn’t a pair of blue jeans shipped thousands of miles from China inherently cost more? Why should French wine from across the big pond be cheaper than nearby California wine of a similar kind? If people want a fine French wine, they’ll pay more for it. Arguably, they should pay more.
Such a nationalistic revival is viscerally feared by the globalists, whose priggish preachings have reached into both the legacy and alternative media, denying us a much-needed complete look at the tariff question.
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