Tweet [1]
This New York Times op-ed from last month – on trade with China – is well-described by its author’s last name [2]. (I thank my Mercatus Center colleague Christine MacDaniel for reminding me of it.) A slice:
First, about 60 percent of China’s exports to the United States are produced at factories owned by non-Chinese companies. Many of them produce customized inputs for American manufacturers, such as computer routers, LED fixtures and boat motors. That means the tariffs imposed by the Trump administration that are directed at China actually affect many American (and European) companies that own factories in China.
These companies cannot immediately respond to tariffs by quickly moving their operations out of China. Instead, they will absorb the import tax or pass it along to American consumers in the form of higher prices. This is already happening: a 20 percent tariff on washing machines imposed in February was followed by a 16.4 percent spike in consumer prices [3] for these products. So most of the revenue raised by the tariffs is coming out of the pockets of American consumers, not Chinese companies.
Pierre Lemieux, in this new EconLog post, warns against the misuse of accounting identities [4].
John Brinkley describes Trump’s own ignorance and cluelessness about trade and trade negotiations [7].
Dan Mitchell makes an evidence-based case for the economic benefits of unilateral free trade [8].
My intrepid Mercatus Center colleague Veronique de Rugy writes that [9]:
Social Security is in the hole. It’s time to stop digging. That means choosing from the many policy options available to Congress to reform the system: private accounts, privatization with a safety net for the poor, or an eligibility-age adjustment. Raising benefits, however, isn’t one of them.