World Leaders Haven't Learned Protectionism Lesson

You would think that the world would have learned, but it is very apparent that it has not. Leaders are obviously trying their best to revive and protect their economies even though the perils of the 1930’s has shown that that leads economies into greater difficulties.

Now, the U.S. and UE are going after China’s export policies. That is a slippery slope that will surely be intercepted by threats by China regarding U.S. treasury bonds and counterclaims that we have aided the U.S. auto industry to the detriment of the global industry. Also, it will be fun to watch the WTO squirm as they are reminded about the “BUY AMERICAN” edict that has been added to the recent U.S. stimulus package.

Are they simply posturing? What is the point anyway…?

From Bloomberg:

SAN FRANC

ISCO (MarketWatch) — The U.S. and the European Union are expected to announce a World Trade Organization case against China over its export restrictions on raw materials, according to a report Monday.

Reuters reported that U.S. Trade Representative Ron Kirk’s office has scheduled a news conference at 9:15 am Eastern time regarding U.S.-China trade, at which industry sources expect the WTO case will be announced.

The action would follow the failure of the U.S. and EU to persuade China to reduce its export tariffs and raise quotas on materials including zinc, tin, tungsten and yellow phosphorous, Reuters reported..

This should be fun to watch…..

Comments

[Tom E.:]

Nothing wrong with keeping it within the WTO system, that what it is there for. The buy America policy was within the WTO rules.

So what is it that you are complaining about?

Jun 23 07:52 AM

[EMS News:]

Dear Mr. Hororwitz: did you ever bother looking at the immense US trade gap? We poured gallons and gallons of red ink into our economy via this method. I seriously doubt the sanity of anyone writing about trade, if they are an American, if they support 'free trade'.

Free trade has been a roaring DISASTER for the US. If you are foolish enough to believe that the US can run a trillion dollar trade deficit each year, you are nuts. The US has run back-to-back trade deficits since 1971 except for one key year: when Bush Sr. sold our entire military system to Kuwait and let them use our military as a mercenary force!

Outside of that singular occasion, the US has only seen its trade imbalances get worse. The only time this imbalance shrinks is when global trade collapses. Even as our international trade falls off a cliff, we still run trade deficits! This must be fixed or our nation shall die. We will go bankrupt to the nations that run trade surpluses with us.

Only a child would ignore this dire news. You seem awfully young.

Jun 23 10:10 AM

[yellowhoard:]

Our trade imbalance is mostly the result of our insane energy policy.

If we were to extract the abundant energy that sits underground in the US, we would have a decent balance sheet.

The fact that our elected officials are putting up road blocks to nuclear power, oil shale, off shore drilling, coal liquification, ect... is nothing more than treason to me.

They are killing jobs and cheap energy at home so that we may be forced to buy from those that we bow down to.

Jun 23 10:21 AM

[Paul in Texas:]

On Jun 23 10:10 AM EMS News wrote:

<Dear Mr. Hororwitz: did you ever bother looking at the immense US trade gap? We poured gallons and gallons of red ink into our economy via this method. I seriously doubt the sanity of anyone writing about trade, if they are an American, if they support 'free trade'.

Free trade has been a roaring DISASTER for the US. >

The only real problem I have with your argument is it's basis. The US has not had 'free trade' for decades.

Jun 23 04:17 PM

[EMS News:]

No, it has had mostly one way trade...to our great disadvantage...with all our trade partners. Name one major manufacturing, even one MINOR manufacturing nation that we ran a trade surplus with.

Jun 23 04:21 PM

[Hot Richard:]

The old dogs are getting ready to feast (since they just got through with "capitalism"). Protectionism in its many forms will come on up.

If you want to see some really insance economic theories, stay tuned to what Congress will be floating the next four years.

Jun 23 07:28 PM

[ozmandias:]

ems is right. all "free trade" has cost in my lifetime is the almost total deindustrialization of america and our almost treasonous owners replaced those productive patriotic made in america good jobs with the completely utterly failed FIRE "economy". how "free" is that young horowitz?

Jun 23 09:24 PM

[TeresaE:]

I just don't understand why we don't use China's own laws, substituting USA for China and vice versa.

That way they can't bitch about it.

1/2 of this "recession" (at least, maybe all of it) can be traced back to sending family supporting, house buying jobs to China in exchange for a handful of elite, huge campaign/library contributions and cheap socks.

Unless we DEMAND jobs, this "downturn" will NEVER end for 80% of us.

Jul 07 10:13 AM