What the world needs now in addition to love is wisdom.
Saturday, February 27, 2016
King Solomon, Donald Trump Fair Trade Post Nine
What is Donald Trump’s plan to balance trade?
In the previous post I stated I will explore first the Donald Trump Position on reforming the US-China trade relationship and offer my opinions and comments.
Without consultation, plans are frustrated. But with many counselors they succeed.. (Proverbs 15-22) Without counsel purposes are disappointed. If a man determines and resolves upon a matter, and at once hastily and precipitately goes about it, without mature deliberation, without consulting with himself, and taking the advice of others in forming a scheme to bring about his designs, it generally comes to nothing; (Gils)
The US cannot resource at the drop of a hat. It will take years to rebuilt closed plants, replace machinery, and train workers to learn many of the lost skills and technology outsourced in the past twenty years. The result will be a spike in prices paid by US consumers for tariffed products. A black market will certainly crop up along with price gouging.
If tariffs are employed American Companies will not risk capital to invest in plants and equipment without long term guarantees that tariffs will not be lifted again. The result will be a repeat of foreign labor lower wage price competition will close them down, or bankrupt them again.
In My Opinion
There will be no quick fix with tariffs. A long term economic strategy needs to be planned and adhered to of what is in the best interests of American workers.
My Next Post
I will explore the remedy proposed by Warren Buffet.