I am a passionate proponent of foreign trade… Notice I didn’t say “free trade”… Free trade implies two or more countries trading freely with one another… Quite frankly, I’m not concerned when a foreign country tariffs a U.S. product, but it troubles me to no end when we tariff a foreign product; when our policymakers favor a select industry over the U.S. consumer… Not to mention the fact, per my video, that tariffs can exact real harm upon their host economy…
That said, I would never discount any American’s desire to buy American… It’s a personal call… And, per the video below, there are indeed instances where one might even buy USA in large scale without severely hitting one’s bottom line…
The cost of constructing the featured home in Diane Sawyer’s report, using only U.S. made materials, was a mere 1% more than it would have been using the standard array of foreign made materials… Now of course, in most cases, 1% on the cost of a home is at least a couple grand (that someone will eat), but nonetheless, to many that would be a price worth paying to support American industry… And I totally sympathize….
The one caveat that I don’t believe I’ve ever seen addressed in exposés like this one, is that a U.S. dollar spent on any item, anywhere on the planet, is a U.S. dollar that ultimately comes home to benefit a U.S. producer – whether it be a producer of solar panel manufacturing equipment or a producer of Treasury Bills (i.e., our current account [trade] deficit helps keep interest rates low)…
Recently, while rummaging through my glove box, I stumbled across a remnant (5 Euros) from a trip to Europe a few years ago… It was good to know that in case I get stranded somewhere I at least have a few bucks for a candy bar, right? Wrong (unless I’m stranded on the Audubon)… I suspect the Johnny Quick cashier would snicker at my effort to buy a Snickers with my foreign currency… So I guess it’s good to know I have something should I run out of kleenex…
Here’s a hypothetical for you: Let’s say (being the grandson of Spanish immigrant Manuel Lopez Mazorra) I make great Spanish-theme buttons really cheap… And this cent-pinching lady in Pamplona, who’s knitting sweaters for her eighteen grandkids, sends me a 5 (Euro) spot to buy a few dozen… Now unless there’s something I need from the Euro Zone, or someone I know (who’ll trade me for dollars) needs something from the Eurozone, or unless my nose is runny and I’m wearing short sleeves, she’s out of luck… If she wants my buttons, she’s going to have to find someone in Europe, who at some point acquired a few greenbacks (perhaps a residential light fixture producer), who’s willing to swap a few for her Euros… Therefore, if the Spanish residential light fixture producer does all his business with U.S. contractors, and U.S. contractors start doing all their business with U.S. light fixture producers, I’m out a sale, and a dozen and a half young Spaniards are wearing pullovers this winter…
Make no mistake folks, there is forever an offset when, either of our own volition or due to government coercion, we fail to allocate our resources in the most efficient manner… I.e., while Ms. Sawyer’s report’s claim that there’s a potential 250k new jobs in the offing may indeed be correct, not considering the net offsetting effect (loss of U.S. jobs elsewhere) is simply shoddy reporting… And the featured economists not making this point (assuming it wasn’t edited out) is irresponsible… Any good economist always considers the unseen…
All that said, you present me two indistinguishable (quality or price) items, one from China, one from the U.S., I’m buying U.S… However, you present me two items, and the one from China presents the quality I’m after at a better price, I’m exercising my freedom to buy it… Not doing so would be profoundly un-American…
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