Columnists
Let’s talk Tariffs
I am not an economist. Everything I’ve learned about tariffs, I learned in the last two weeks. But I’m not a fool. Newly-elected bully Trump also fits the first category. Jury is out on the second.
So, what are tariffs, what do they do, and do they work? I did a lot of research on this, and you can thank your lucky stars, I decided not to share it with you. Let me just say that American presidents, including Lincoln, and a few Canadian Prime Ministers, including Sir John, fought hard for them. The reason why is the cogent point here.
BTW: My history diatribes are getting so short, they will soon read: “Lincoln; president; shot dead.” You’re welcome.]
Tariffs are a tool used to boost domestic production. They are often used in tough times, like the Depression or other domestic crises. The McKinley Act, which pounded an exorbitant tax on Canadian barley and hops, ended our glorious Barley Days in the County, and turned us toward building our canning industry. We’re versatile that way.
HOW IT WORKED
First, we need to understand that, when Americans look in the mirror, they only see themselves. They were the ‘All About Me’ generation when George Washington was a baby. This part is important:
Many, many presidents have ordered tariffs on imported goods, when times were tight, the economy was down, and unemployment was a major issue. So, ta-da! Shut down foreign imports, turn production back to American workers, good jobs, lots of work.
We called this ‘American protectionism’, which was a big ‘Closed’ sign in the window, or perhaps ‘Under Renovation’. Did it work? Yes and no, depending on the time.
Keep in mind the Industrial Revolution of the 1800s took place a decade after the American country was formed. This is important because workers, and the work they did, were critical to the growth of the new country.
‘Blue collar’ workers—those who created things—were the lifeblood of what was to become the USA. And so industry boomed. Automakers, steelmakers, coaldiggers, garment manufacturers, lumberers, energy suppliers, telephone installers—jobs everywhere for the taking.
WHY IT DOESN’T WORK NOW
Let’s ease in. I just described the world of 1957. I’m sure you’re aware things have changed. Let’s break that down.
Globalization. Mulroney was all up in this, and I wrote violently against it. In retrospect, globalization was inevitable. Years later, I realized the error in my ways. I did not take change into my process.
Globalization was not an accident. It was a change of course. A change in direction, driven by America itself.
Remember when we used to laugh at a product labelled: ‘Made in Japan’? “You got yourself some cheap crap there, buddy! Hah, hah!” The laugh was on us.
American industrialists soon realized the value of using foreign workers who were totally capable of building—well, anything you could throw at them. And cheaper, thanks to a huge labour force, brutal wages and lack of any visible regulations.
And so began a shift in American industry. “Here’s the deal: We use our white collar Silicon Valley to design our tiny chips and stuff, we give them lots of money and we send the designs to you. You build it, send it back, and everyone makes money.”
This changed the face of American production. The American blue collar worker was left behind. “It was a good run in the ‘60s, Dave, but I’ve found someone who can build a Samsung wide-screen TV, and have it in my home in 24 hours. Please, just take your GE black and white portable TV and hit the road.”
To be clear: Tariffs to protect and preserve production jobs are no longer effective. Time to bring in the Big Cheese, who apparently feels that 1957 thinking can solve 2025 problems.
WHAT’S THE REAL GAME?
Clearly, Trump’s tariffs are not designed to grow the ranks of blue collar workers, as in the past tariffs. There’s not a pile of steelworkers hoping the tariffs will bring jobs back. Even the construction workers have said they need steel NOW, and will pay whatever price they need to keep their millions of projects on track, tariff or no.
Obviously there’s no hope for growth in the industrial sector. Build a new steel mill? Will take four years and a billion or two dollars. Trump is in for four years. When you open your doors in four years, God knows what the world will be then. Tariffs gone? The risk is too great. So that’s not the plan.
GANG TATTS
Consider this: Trump is attacking and bullying every democratic nation who were former allies. He’s had hands-off on Putin and Russia, North Korea, and every nation governed by despotic bullying regimes. It seems to me his behaviour is in line with wanna-be street gang members who need to earn their creds, so they can step up with the big boys. Just a thought, but keep an eye on this. I think it will prove to be true.
WE (ARE NOT) THE WORLD
Trump is ego personified. It’s easy to think he’s crazy, but watch your step. Add the pieces together—Canada, Mexico, Panama and for some unknown reason Greenland (who are going, “What? Us? Do you even know this guy? Is he addicted to halibut?”)
This is Manifest Destiny (read a book for God’s sake!). He wants an America—from the North Pole, east, west, north, south to Panama, and probably that great taco shack on the other side of the canal, in Columbia. And he’s damn sure he can do it.
HE CAN’T
You know what’s really cool about having an egotistic, autocratic, name-calling bully living next door to you and threatening to take over your house?
Well, have you seen Independence Day? Or perhaps World War I and II? Nothing like a common enemy to unite the world. If you can take it, I encourage you to go on You Tube and view Canadian reactions (and some powerful words from Europe). This one from an NDP is great, though he kind of loses it at the end:
https://www.youtube.com/watch?v=CsnzmM7bEAU
Also Jean Chretien’s letter to Trump shows what a true statesman he was and is. Hundreds of Canadians have spoken up from every quarter. Common enemy indeed.
Politics is about to play a big role in this. I’m watching. Regardless of your political stripe, listen to Mark Carney. This is his wheelhouse, and his responses are calm and well-considered. Throw your preconceptions aside, and listen. There’s a new game afoot.
Comments (0)