Harley-Davidson to move production for some motorcycles out of US after EU tariffs

[Clocker]

Originally Posted by tucker6

Int'l trade is not complex? Govts don't need to be involved? ...Govts don't need to involve themselves in int'l trade regulations for the good of their citizens and economies? Is that what I believe you wrote above? If that is true, it's trash.

Another dose of reality:

Trump’s musings foolishly focus on international trade deficits, and then dress up his prejudices in bellicose terms that reveal his willful and persistent economic ignorance. His number one obsession is with the United States’ net deficit in foreign trade. His crusade amounts to bringing back mercantilism with a vengeance. His agenda for trade with China centers on the misguided goal of making the Chinese buy greater volumes of American goods. But by this maneuver he throws his weight behind a sideshow. The real agenda should always be to reduce barriers to trade by lowering tariffs in both directions, trade deficits be damned.

Why? Because trade is not one mega deal between the United States and its former friends. It is a set of thousands of individual transactions by informed players, each of whom gains from the deals it makes. Increase the velocity of the deals, and you increase the social gains on both sides. American farmers and exporters, both part of his base, benefit by getting into foreign markets with more attractive prices. Putting up tariffs will, for example, shut out Maine lobstermen from selling to China. It will block American producers and consumers who benefit from getting cheaper goods from abroad. It ignores the reality of complex supply chains, whereby U.S. companies repackage imported components for re-export or vice-versa, as with iPhone production. The trade war slows down imports and exports alike. It shows no winners, for no nation wins a trade war when tariffs and other restrictions shrink the overall size of the pie.

Trump’s trade supporters naively claim that our master poker player can pull out a better long-term deal from this short-term mess. Dream on: Short-term losses are etched onto the social DNA. Long-term restrictions are even worse. It is absolutely critical never to take the first step toward a trade war, given that all trade wars are unwinnable, except in that destructive sense that allows the President to trumpet a U.S. victory by claiming that we have lost less than any of our angry trading partners.

https://www.hoover.org/research/dona...e7c05-72878477