09/19/24 Afternoon CommStock Report – Tariffs-Aghast from the Past

Part 2 of 3 Not all tariffs are bad or unjustified. When a country like China subsidizes its export industry so that it becomes competitive because of those subsidies, the countries where industries are harmed have the right of self-defense in use of countervailing tariffs. The tariffs essentially originate because of actions first initiated in China. China has damaged and even eliminated industries in the EU and US with its state entities and domestic subsidies. China now overproduces goods and has been warned by Treasury Secretary Yellen, in a visit there that it must stop. Its refusal to do so prompted the Biden Administration to levy more tariffs.   Much of China’s growth came as the result of state enterprises subsidizing Chinese exports. China has been an export predator. It subsidized industries to provide jobs and fuel growth so that these industries could continue producing despite being unprofitable. It worked for them up to this point.   Cutting and pasting from Wikipedia, “According to Dartmouth economist Douglas Irwin, tariffs have served three primary purposes: “to raise revenue for the government, to restrict imports and protect domestic producers from foreign competition, and to reach reciprocity agreements that reduce trade barriers. President Theodore…