Originally Posted By: aa1986
Still sounds to me that a lot of folks don't like the way the free market works.
Protectionism is not free market. Government intervention is not the answer.
The sooner people realize the reality has changed, the better off they will be as they prepare for the future. Looking at the past with rose colored glasses and imagining we can somehow get back to that makes no sense. It's not reality and it's not how the market works.
Look at oil. For decades we complained about relying on Middle Eastern oil. No policy from any political party nor multiple wars could reduce that reliance. But when the price went high enough, the market had enough incentive to innovate to extract from new sources and now we are well on the path to oil independence.
The market is all powerful. As Margaret Thatcher said "You can't buck the market". In this case, there's no way we can keep established, easily copied manufacturing in this country when there are tens of millions of over educated and more motivated Chinese with wage requirements of 10 times less than here.
If you punish the companies that outsourced manufacturing, you're handing a huge advantage to foreign competitors who can still manufacture in China and import into the US tax free.
Protectionism is a weapon in international trade war. You want the other side to be free trade while you are on protectionism. It is as impossible for world wide free trade as world peace.
The only way you can have protectionism successfully is if you are only exporting stuff and don't need to import much. Brazil is very successful in protectionism because they don't care about exporting much high end manufactured goods and their export is raw material and low priced agricultural goods that are price sensitive anyways.
US have a lot of exports that are vulnerable to retaliation. Aircraft, telecommunication equipments, industrial standards that generate royalties, movies, and food export. Try raising European import duty and they would immediately retaliate by raising oranges import duty. Try raising Chinese import duty and they immediately ban Microsoft Windows on all government computer purchases and a few more Hollywood movies.
Look at Japan, they used to be a huge protectionism nation in the 80s because everyone is begging to buy their stuff, but now even they have to open up trader barriers after a 20 year recession.
