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Foreign Enemies Related to Tariffs

6/16/2019

 
The tariff can be a tool for foreign policy.  There are many dictators of countries that do not treat their people well.  Some dictators sow hatred or chaos across the world.  Targeted tariffs have been known to stop the bad behavior of other countries.  There have been many instances where the tariffs did not change behavior, and the people of the country with bad leadership has been negatively affected by the lack of trade.  It can be truthfully stated that the country’s lousy leadership led to the adverse results; however, it is also true that the refusal of America to allow free trade hampers the thriving of poorly governed countries.  The leaders of countries like East Germany before 1990, North Korea, Cuba, and others had shown that they are willing to allow their people to suffer critically when America tried to put pressure on them.
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 It is hard to live down two different timelines to determine if America made the right choice; however, it is inevitably a mixed bag.  East Germany cut itself off from trade and lived in much worse conditions compared to West Germany that allowed much more open trade.  If America puts pressure of tariffs and even trade blockades on other countries for misbehaving as a nation, the overwhelming blame of low living standards should rest solidly on the depraved leaders of the country.  There simply is no evidence that America harms countries that are not either hurting its own people or other countries.  There is also a real concern that if America trades with or allows other countries to trade with a terror-sponsoring dictator; then the dictator would have more money for terrorism.  Trading military weapons or military technology must always be of great concern.  The benefits of free trade are overwhelmed by our enemies attaining military might.
Mexico is certainly not the enemy of America; however, at the time of writing this article, President Trump stated he was going to impose a tariff on all Mexican products until the Mexican government stops the flow of immigration into America on the southern border.  Without a doubt, these tariffs will harm economic activity.  However, there are more essential issues at play.  This tariff is not about protectionist policies to help American businesses.  This tariff is not about collecting taxes.  This tariff is about putting pressure on Mexico to not assist the immigrants flowing through Mexico into America.  However, you come down on this issue, the issue here is that the President is using the tariffs to change the behavior and policies of other countries.  These immigrants are not (beamed in), so we do not only have the effects of labor.  These immigrants live here in America and create economic changes in circumstances with hundreds of both positive and negative effects.  The most significant benefit is hopefully greater respect for the rule of law and respecting borders.     
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Tax neutral by reducing other taxes

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It could be totally justified for America to state that they are going to match any tariff by other countries so that America receives the same tax revenue as the other countries.  Adjustments could be made to factor in service provided differences.  This tariff match could give incentives to other countries to lower their tariff because it would reduce America’s tariffs as well.  Free trade is better for both countries.  If America adopted the match tariff program, it should be tied by law directly to an adjustment in income and corporate taxes so as to remain tax revenue neutral.  The tariff match law would have an automatic increase or decrease to other countries and to remain tax revenue neutral.  The tariff would create a higher disincentive to do trade; however, would be matched with a reduced tax deterrent to engage in other transactions.  This matching tax feature is designed to reduce the tariffs and if they do not, raise revenue in exchange for lower taxes elsewhere.   The bad behavior of another country could create a need for higher military spending as a show of force or possible kinetic military actions.  If this is the case; the tariff revenue would go straight to the military; thus, the tariff is paying for necessary services of protecting America.

Collecting Taxes Is Bad Because the Government Uses the Tax Revenue Badly

There are anti-government people that do not want the government, even America, to tax because that gives the government more money to mess things up.  That is arguably true for 80% of the government.  The government even misuses the 20% in many ways.  Collecting taxes is a net good if the government uses the revenue wisely to protect themselves from foreign foes or creates a good rule of law.  There can be a justifiable use of a tariff to pay for the services surrounding trade coming across the border such as border control, ship inspections, and military and Coast Guard services to protect the ships.  Although most infrastructure should be in the private sector, if the government takes over the role of shipping terminals and roads, a tariff could justifiably be used for those services as well.  If the private sector did provide those services, the ships, tankers, truckers, among others would pay for the services they use.  The private Sector providing the necessary services means that the role of prices is fully at work and proper investments would be made.  The role of prices results in better prices, expenses tied to services, and less political decisions.
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In Conclusion

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In conclusion, tariffs can be a useful tool regarding foreign policy.  Other than raising money for necessary services related to the trade; trade restrictions are harmful to America economically.  However, the values of better foreign policy and a better rule of law can be more powerful than the loss to the economy.  Without a doubt, the tariffs harm the people of the tariffed country and often suffer a low standard of living.  Sometimes the corrupt leadership of American’s enemies, changes policy for the better and sometimes for the worse.  The reform of Haley2024’s Pockets of Freedom would come with a 5% military tax and then full free trade.  The Pockets of Freedom economy and regulatory structure would be the full CRA structure.  Allowing open immigration into Pockets of Freedom from hostile countries with a robust incoming filter and banishment laws would give oppressed people of the world a place of refuge.  Thus, creating a strong incentive for bad leadership to reform.
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