Blog/Armstrong Economics 101
Posted Jun 17, 2016 by Martin Armstrong
QUESTION: If Donald trump issues a tariff on countries like china will that cause the price of goods from china to go up in price?? Also is he correct by saying it will bring jobs back to the united states by doing this? Would overall implementing a tariff be a good thing or is it a bad thing.
ANSWER: Tarrifs would not work and it would have a negative impact. Most people do not realize that China deals with Europe more than the U.S. does. For 2015, the U.S. sold 116,186.3 billion to China and bought 481,880.8 billion from China. People complain about sending jobs overseas, but no one ever talks about the fact that it reduces costs for consumers. To subsidize jobs, consumers need to pay higher prices. The better model is to improve one’s skills to rise in value for employment. It is a national’s comparative advantage. Yes, we have lost the low-level manual labor jobs to countries overseas that were not unionized or overvalued for the skill they presented. The key to advancing is to keep pace with changes. As a programmer, if you refused to learn new skills, you would be obsolete and only able to code in DOS, which is not even in any Windows platform. Who would hire you?
Tags: China, Labor, outsourcing overseas