Quote:
Originally Posted by Shallow
A tariff means inefficiency, you figured that out correctly, but it could never ever help you establish an export-sector. That's the point of a tariff, to save products, that aren't competitive on the world market otherwise...
Remember, a niche in the global market doesn't need any protection at all.
The very first step is to figure out where to compete, it needs to be a sector where Americas productivity overlay covers the cost advantage of the competiors from Far East. After that, the expectations of longterm benefits will take care of the rest - no tariffs needed...
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I agree with you that if we had a niche in the global market a tariff wouldn't be needed, but a tariff would give support to companies that produce goods, and maybe when they are large enough they will be globally competative. For instance, the US had large tariffs when the country was young so the industries could grow to when they were globally competative later. If the tariffs weren't enacted than there would be no buissines to export anything later.
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Just don't underastimate the commerce with services, especially the New Economy services - that sector has huge growth rates compared with the production sector. The US is pretty dominat there, y'all should pretty much zoom in on that - the weak dollar right now takes care of the rest...
The trade deficit doesn't worry me too much anyway though.[/quote]
The problems with the weakened dollar would happen on their own, if a tariff is increased or not, but we are just living on borrowed time untill the dollar does weaken enough.
I am also wondering if a weakened US dollar would have negative effects
besides making it harder to import products. I am unsure of any, but it seems like that some more would exist. If there isn't any than I would be more alright if the US dollar is weakened.
If a tariff is increased right now it would not only increase the costs of importing products, which you are saying would happen naturally anyway, but it would give money to people in the US to buy more products overseas. The increased revenue from the jobs that were originally done overseas would also allow the US to purchase more products from other countries.