No to Protectionism Mr. President

from IBD:

High Tariffs And Weak Dollar Are No Way To Make America Great Again

As we’ve noted many times, President Trump’s first year was a rousing success when it comes to economic policy. But one new troubling exception has recently emerged: The Trump administration’s advocacy of a weaker dollar and trade protection. It’s a big mistake.

 In recent months, the U.S. dollar has weakened noticeably against other currencies. The Fed’s trade-weighted dollar index, which measures the dollar’s value against all of our trading partners, after adjusting for volume of trade, has fallen just over 8% in the past year, to a three-year low. That’s a sizable decline.

What concerns us is that the pace has picked up since the start of this year, with the dollar falling more than 3% since January 1 as talk of more trade protection for the U.S. economy gathers steam.  More importantly, the Trump administration has all but announced an explicit policy goal of having a weaker dollar. read more

Just Say No…To Tariffs

by: the Common Constitutionalist

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President Trump said a lot of things over the past couple of years. He made a lot of claims and assertions – some of which he has backed off on recently. For example – it doesn’t appear that we will be seeing Hillary behind bars anytime soon as Trump described during a debate. I also doesn’t appear he has the desire to deport all 11 million (more like north of 20 million, in my opinion) illegal aliens.

While I don’t necessarily agree, I understand why he would just want to move on, rather than rehash old claims. And who knows – maybe he’ll get to them in good time.

But one thing he hasn’t backed off of is his desire to build a wall on the Southern Border and have Mexico pay for it. At the time, no one knew what his method for extracting the estimated $12-$15 billion out of Mexico was going to be. I’m sure some thought that he would insist that Mexico just cut a check or something.

Now we know that President Trump’s plan is to attach a tariff of up to 20% for all goods imported from Mexico to the United States. This, my friends, is some bad juju. read more

Both Trump and Christie are Big on Protectionism

by: the Common Constitutionalist

When Chris Christie first exited the Republican presidential primary, I figured he would then throw his endorsement to one the establishment candidates left in the race. But then he threw his weight (pun intended) behind Donald Trump.

Other than both portraying themselves as tough talking, gravy-stained champions of the blue collar set, they didn’t appear to have a lot in common. Well, I found one thing both Chrispie Creme and The Donald share a desire for – and that is protectionism.

Protectionism is one of Trump’s major platform items. He of course will never describe it as such, but he’s been telling us for months how he will make great trade deals with China, Vietnam, Japan and Mexico. A large component of these “great deals” is tariffs slapped on these countries in an effort to drive up import prices thereby making American made products more competitive.

That my friends (hat tip – John McCain) is protectionism. It’s the government manipulating the free market (as if there is such a thing) in order to artificially pick winners and losers.

What actually happens is that companies which are then “protected” from less costly competition are free to raise prices. In effect the government just creates a monopolistic economy where the end user, the consumer, always loses in the end. read more