many smaller economies use tariffs to protect their own industries while they develop. for example the fledgling united states used extremely protectionist tariffs to develop its economy in the face of would-be competition from britain and succeeded in building its own industrial base, ultimately becoming the most wealthy and powerful country in the history of the planet.
now the shoe is on the other foot, and the developing countries of the world have a choice to make: they can either try and protect their own economies which will result in increased prices and inflation unless they find alternate sources of trade, or they can become vassals to the united states, allowing a scale of outflow of resources and commodities which largely precludes further development and keeps them as a places known largely from stickers on fruit and labels on clothing, both kept cheap for american consumers.
for the united states, pursuing protectionist trade policy as by far the largest economy in an integrated global system of trade leads me to wonder what the supposed benefit of eliminating trade deficits is. is the hope that manufacturing will return? not until the cost of american labour is greatly reduced, and that may be acheivable by immiserating the bulk of the american population. essentially it seems america is enacting a speedrun of 90s russia. i expect a similar outcome: rapid reduction in life expectancy, empowerment of oligarch class, degradation of democratic safeguards, increase in corruption, increase in reactionary social tendencies. congress is seeming more like the duma every day, 'opposition party' included lol
financialpost.com
