[Newfie]

Outcast,
If we provide jobs for 500 folks in a Steel mill making a decent wage then their salary will disperse throughout the economy in many ways. They buy homes and cars and furniture and pay taxes and come off of unemployment and assistance. And maybe kid gets to go to college to boot.

Trickle down.

Maybe we have to pay a wee bit more for some stuff we buy from China. That will only encourage more home grown industry. So it all evens out in the end.

No one really knows exactly what all the impacts, plus and minus, will be. The whole system is far to complex to allow exact determination. Many points are arguable. However I do think it is a step back from globalization which has been over done.

[Zarquon]

Sorry for posting a link to a 25-year old article, but when I came across it a while ago, I thought it worth bookmarking:

https://www.theatlantic.com/magazine/ar ... ks/305854/

It's a long read, from the time when Americans were afraid all US golf resorts would soon belong to the Japanese, but IMO it's still very much worth reading. The central argument is one that history, not current economic theory, teaches: no industrial economy became successful by adhering to free trade. Not Japan, Germany, or Korea; certainly not Britain or the US. Even though these industries started out under vastly different circumstances, protectionism and interventionism were crucial to their development. Only *after* growing competitive on a global scale, they began to adopt (some) free trade policies.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Zarquon', 'S')orry for posting a link to a 25-year old article, but when I came across it a while ago, I thought it worth bookmarking:

https://www.theatlantic.com/magazine/ar ... ks/305854/

It's a long read, from the time when Americans were afraid all US golf resorts would soon belong to the Japanese, but IMO it's still very much worth reading. The central argument is one that history, not current economic theory, teaches: no industrial economy became successful by adhering to free trade. Not Japan, Germany, or Korea; certainly not Britain or the US. Even though these industries started out under vastly different circumstances, protectionism and interventionism were crucial to their development. Only *after* growing competitive on a global scale, they began to adopt (some) free trade policies.

[KaiserJeep]

In fact I found that Atlantic article to be an interesting read, and very on-topic for this thread.

I will say only that when he wrote that article, Fallows appeared to be a fan of Japanese culture. However, IMHO the very features of that culture that he professes to admire were the root cause of the severe downturn in the Japanese economy that took place in 1991 to 1995. It was not until 2007 that they recovered from their "asset bubble" and the GDP grew back to 2005 levels.

The same malaise has affected the USA and the EU since then, and in my mind all three economies continue to suffer from the same problem. The problem is the high level of wages and benefits expected from the Middle Class labor forces in these places. As I mentioned earlier in this thread: "They expect a more than living wage, employer-funded medical insurance, retirement benefits, workplace safety, environmental protections, paid vacations, profit sharing, and numerous other expensive-to-provide things."

I will not argue whether or not these Middle Class expectations are reasonable, only that they are the primary cause of the job losses to China and other Far East and Latin American nations. There is a real gap in the expectations of the total compensation packages enjoyed by laborers in the First World, which is why many of their jobs were exported to China and the 3rd World.

Whether or not Trade Protections will help is not a simple topic. I believe that they will prevent and to some extent reverse the job losses. They will also increase the already high cost of living in the countries that put them in place. The possibilities range from a net benefit to a net deficit, and as always the devil is in the details of how such protections are implemented.

[KaiserJeep]

Too late to edit the message above, but I meant to say:

$this->bbcode_second_pass_quote('', 'I')t was not until 2007 that they recovered from their "asset bubble" and the GDP grew back to 1995 levels.

[ROCKMAN]

Still need to wait a little longer to see where the matters settle out. But the early reports are that, at least initially, a trade war is not brewing. In fact while you don't see reports in the MSM (for obvious reasons) countries are negotiating more favorable deals with the US. Including China and S Korea. They are making concessions in exchange for a reduction of the new tariffs the POTUS is threating. Next in line is a renegotiation of NAFTA. Leaks indicate both Canada and Mexico are willing to give some advantages.

As always, time will tell.

[KaiserJeep]

NAFTA renegotiation? Wait until Mexico learns that Trump will have them paying for a border wall.