The Washington Outsider

“Made in America,” “Buy American” Requires Good Trade Policies: Trading Manufactured Versus Extracted Goods

7/17/2017

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The “Made in America” campaign of the Trump Administration, which is akin to the decades-old “Buy American” campaign, may draw the scrutiny of critics, but the sentiments resonate well among the American People.  A PR campaign is, however, not what Americans need.  Encouraging people to buy American products with patriotism and guilt might push some individuals to purchase products made in the Untied States.  Unfortunately, economics behavior is not driven by emotion.  Over time, people will buy whatever products serve their economic interests.
 
The only individual economic question is whether to opt for cheaper, less durable products or more expensive, more durable products.  Beyond that, the winners will always be the businesses, industries, and countries that provide consumers with products that present the best value.  Consequently, the United States, and all other nations, need to focus on policies that can foster the kind of economic environments and industries capable of providing domestic and foreign consumers the best value.  In part, this means crafting trade policies that reflect the national interests of nations and the Peoples of those nations.
Since taking office, the Trump Administration has withdrawn from TPP and threatened to abandon NAFTA, which is viewed by proponents as a means for the US to compete against cheap Chinese labor by utilizing cheap Mexican labor.  In terms of building trade blocks, China would also have to secure cheaper labor to out compete the US.  TPP, from which China is currently excluded, has been framed as a means for the US to secure US economic interests and rewrite the rules of trade in Asia, yet critics see it as a threat to American workers.  Although the US has rejected TPP, other TPP members have moved forward, including Japan, Australia, New Zealand, and Vietnam.  
 
For the aforementioned countries, the TPP framework may well be more advantageous than detrimental.  While some of the TPP countries are wealthier than others, which can put the workers of the wealthy ones at a competitive disadvantage, their relatively small sizes allow these nations to specialize their industries and take advantage of the products their partner nations specialize in without deleveraging their domestic industries.  Just as the EU offers costs and benefits for wealthier Germany, France, and Great Britain, TPP can be beneficial to rich Asian nations as well as poor Asia nations in need of capital and jobs.  There will, however, be detrimental costs if TPP simply intensifies competition by undermining domestic production.  
 
For big and rich countries like the US, which has a large population, an extensive cache of natural resources, and plentiful capital, TPP can easily do more harm than good.  When it comes to trade, the US needs to lower technical barriers to trade, which TPP does whether or not the US adopts it due to many of the standards incorporated into the agreement.  The US also needs tariffs lowered on US goods.  Unfortunately, broad “Free Trade” agreement threaten the US manufacturing sector, because cheap imports and outsourcing to cheap foreign labor place US-based operations at a cost disadvantage.
 
Because the quality and durability of goods matters as much as price, removing tariffs to make cheap goods even cheaper is not sound policy or helpful to consumers.  On the one hand, he US has an interest in security a manufacturing sector that provides a massive number of well-paying jobs.  On the other hand, the US has an interest in securing trade relations and building the economic sectors that provide the raw materials used by industry.  In manufacturing, products are produced by workers and machines, thus operations and jobs can be outsourced, which means “free trade” represents a threat. 
 
In the agricultural and mining sectors, however, goods are grown and extracted, thus their production cannot be outsourced.  Although prices face upward pressure from global demand, the price of all goods are based on global supply and demand.  Selling America’s goods extracted from America’s natural bounty to the rest of the world can, therefore, help create jobs in the US, guarantee the viability of US industries, and extend America’s economic reach.  It also allows America to set the standards on environmental and labor regulations.
 
There is, of course, a strong argument to be made for securing America’s long-term needs by under-developing America’s drilling and mining operations, but those are industry specific while long-term interests must be balanced with short-term needs.  Looking at the potential US-Mexican Sugar Pact and the fight to secure the US sugar supply, sugar producers place a great deal of pressure on government to safeguard their market shares and the viability of their industry.  The interests of the industry are not, however, necessarily always those of the US government and the American People.  
 
Americans share the long-term interest of maintaining viable industries, but the government’s responsibility of ensuring safety and a secure supply of goods trumps industry interests.  Under the sugar pact, there are a number of mechanisms to control how much and what kind of sugar can enter the US market, which creates an overly complex and inefficient compromise that taxes the sugar market.  Free trade sugar deals alone are not likely enough to protect the viability of the US industry, but a trade pact that relies on tariffs to maintain prices and balance subsidies, instead of other more cumbersome protectionist measures, would allow the sugar market to function more efficiently without catering to the especial interests of the sugar industry, thereby maximizing the benefit to US consumers.
 
With that in mind, the balancing of competing interests is a way for government to play its role in trade across all industries and fulfill the interests of the American People, which are the only interests of government.  Securing America’s economic superiority in the global economy does not require a broad free trade response, especially when such policies deleverage American manufacturers and workers.  US prosperity can be secured by fostering healthier trade relationships and opening the world to extracted US goods in a way that US domestic interests, including jobs and the US manufacturing sector, are also protected.

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        • Should the Government Control Talk Radio to Make it More "balanced"?
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      • Should One's Faith Influence a Citizen's Vote?
      • Should the U.S. Government Help Fund Election Campaigns?
      • On Defunding Political Science Research
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      • Justice for All: The Case for Legal, Social, Economic, and Personal Justice
      • Why Hardliner Thinking in the NSA and CIA is Doing Damage
      • On the Baby Boomer’s Self-Centeredness
      • The Case for Personal Responsibility
      • What Modern Day Revolutionaries Need to Learn from Leader's like Mandela
      • Rising Western Acceptance of LGBT Primes Culture Clash
      • The Need for Wisdom Beyond the Numbers
      • Perceptions of the United States
      • How Honesty Relates to the Great Recession
      • Why the Middle Class and Rich Need to Support Their Long-term Interests
      • The Aristocratic Republic of the United States of America
      • Discussing the Need for Community Support
      • Why New Forms of Capitalism and Socialism Will Compliment Each Other
      • The Reason We Need to Understand What it is to Be Poor in America
      • Why the World Needs to Reinvest in America
      • Why Are We Against Terrorism?
      • Why Does Terrorism Exist?
      • US Influence: The Value of American Citizenship Around the World
      • Responding to "the Soldier as Sacrficial Victim"
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      • How comfort defines us as people >
        • Is Suicide a Cowardly Way Out?
      • Defense Against the Dark Arts of Manipulators
      • Defining Abuse >
        • On the Willing Victim of Abuse
        • How to Understand Abuse Victims
        • Recognizing Abuse
      • The Role of Substitution in Decision Making
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        • Mental Illness is Not the Cause of Anger and Violence >
          • Trying to Understand the Boston Marathon Bombing and Other Violent Crimes
          • Getting into the Twisted Mind of the Tucson Murder
      • Describing the Mind as Modes of Thought >
        • It’s Just Sex?
      • Relationships, or Arrangement
      • Understanding the Effects of Groupthink in the Workplace
      • Relating Circular, Inductive, and Deductive Reasoning to the Scientific Method and Religion
      • What is a Redneck? Understanding Different Cultures and Thinking
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      • The Need for Greater Economic Leverage >
        • Evaluating NAFTA and TPP
        • Undercutting Logistics with the Underpaid Independent Contractor
        • Unions: Hindrance or Essential to Free Markets
        • Eminent Domain Used Against Banks
        • Haitians Sue the UN for Failure to Help With Cholera
        • Looking at How Corn-based Ethanol and Other Alternative Energy Subsidies Stack Up
      • Empowering the Sovereign Nation-State by Rethinking Trade Policy >
        • Irish Sovereignty Lost Before Bailout
        • Why Sudan's Greatest Long-Term Hurdle is Our Lowest-bidder Economy
        • Reduce US Imports by Buying American Made Products
      • Ending the need for government support and tackling poverty
      • Income inequality: understanding the limitations and psychology of disadvantage
      • Looking at the Future of American Jobs >
        • On Questioning the Need to Address Economic Disparity
        • Minimum Wage is Not the Problem
        • Responding to the "Blip"
        • Why Education Is Not The Civil Rights Issue Of The Twenty-First Century
      • Considering the Impact of the Capital Gains Tax Deduction
      • Embracing a Capitalist Mindset >
        • Capitalism Versus Socialism
        • The Negatives of Socialism
      • Stealing Intellectual Property
      • Changing Business Models: From Enduring Entities to Cash Cows
      • Consumer and Investor Evolution in the Great Recession of 2008-09
      • Dealing with the Issues Surrounding the Patenting of Self-replicating Technologies
      • Is Technology Threatening Jobs?
    • Education >
      • The Role of Education in Creating a More Dynamic Workforce
      • Primary Education in America and the Changing Needs of Society
      • The Greatness of the American Education System
      • Ideas for Improving the United States Education System
      • Are Teachers Treated as Professionals?
      • Is Engaging Parents in Their Children's Education a Major Factor in Turning Around Low-performing Schools?
      • Should Grants Be Awarded to School Districts that Try Innovative Methods to Improve Student Achievement?
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      • On Reading the US Constitution
      • The Senate should not do more to limit the powers of the Judicial Branch
      • On the DOJ Justifying the “targeted Killings” of US Citizens
      • Corporations Do Not Have the Same Rights as US Citizens >
        • Corporate America Pleads the First
      • Discussing the Constitutionality of Per Capita Taxes
      • Was the California Supreme Court Right in Legalizing Gay Marriage?
      • Should the Bible Continue to Be Used for Swearing-in Ceremonies and in Courtrooms?
      • Should Religious Student Clubs Be Allowed in Public Schools?
      • Should the Government Control Talk Radio to Make it More "balanced"?
      • The Second Amendment: Not Outdated >
        • Are We Losing Our Second Amendment Rights
      • Eminent Domain Used Against Banks
      • Should a Woman Have the Right to Choose Abortion? >
        • Should Fathers Be Able to Opt Out of Parenthood?
      • Should Smoking Be Allowed in Public Places?
      • Is Teen Driving a Right or a Privilege?
      • Should US Companies Be Required to Provide Equal Pay to Women and Men?
      • Is eighteen too young to vote?
      • First Amendment Rights: The Priviledge of The Press
      • Do Mandatory Seat Belt Laws Violate Individual Rights?
      • Should cell phone use be banned while driving?
      • Dealing with the link between video game violence and children's behavior
      • Should police have to submit to routine drug and alcohol testing?
      • Public schools should not impose mandatory drug testing on students
      • Are High Taxes on Cigarettes Proper?
      • Should pharmacists be required to violate their religious beliefs and dispense the "Morning After Pill?"
      • Should school counselors uphold patient privacy or report students who become unstable?
  • For the record
    • Ongoing Issues >
      • Red Dawn in Ukraine: Understanding the Actions of Russia >
        • On Russia’s Coercion of Ukraine
        • The Russian Annexation of Crimea in the Eyes of the World
        • Putin Has Overplayed His Hand With Crimea
        • Ukraine in Terms of Resovereignization
        • Avoiding a Conflict Between America and Russia Over Ukraine
        • What Drives the World’s Interest in Russia’s Actions in Ukraine
      • China’s Aggressive Pursuit of Interests Demands a Global Response
      • Iran Makes a Deal: A Start to a Long-term Diplomatic Effort to Denuclearize Iran >
        • On the Future of a Nuclear Negotiations with Iran
      • America's Sphere of Influence: Retaking South-East Asia >
        • Power in Asia: Looking at the Power Shift in Japan
        • The China Paradox: Why America is Worried About China
      • Assessing US Support of Israel >
        • Tread Softly Israel for a Heavy Step May Be Your Undoing
      • Understanding the Dysfunctional Nature of the US-Pakistani Relationship
      • Recognizing the True Threat Behind the Current Unrest in the Middle East >
        • Reacting to the Escalating Crackdown in Syria
      • Assessing the Threat of North Korea >
        • Answering North Korea's Call for Food Aid: Breaking the Vicious Cycle Forced Upon Us by a Warring Nation
        • Dealing with the Restarting of the Korean War
        • North Korea Attacks South Korea
      • Dealing with the Ill-effects of Climate Change
      • Racial Inequality and Oppression Do Truly Exist in Today's Society
      • Should energy independence be a high priority in the US?
      • An overview of world wide Human Rights violations
      • Nuclear Threat from Pakistan
      • Return of The Cold War?
    • World >
      • Coverage of FIFA World Cup is a Chance to Focus on Poverty >
        • The FIFA World Cup Offers Benefits for More Than Brazilian Soccer Fans
        • FIFA Can Bring Brazilians Together as a Nation
      • Being Prepared for Any Potential Dangers at the FIFA World Cup Games
      • Treading Softly on the Politicizing of the 2014 Sochi Olympics Over Gay Rights
      • Why NATO Operations in Libya Lack a Well-defined Mission
      • China Hijacks the Web
      • Lessons from the Great Japanese Earthquake of 2011
      • A Modernizing Cuba Offers an Opportunity for Capitalists
      • The Seeds of Democracy Take Root in the Middle East
      • The Rebirth of Democracy in Tunisia
      • What May Come from the Hurt Revolution in Libya
      • Responding to the Violence of Qaddafi and Other Besieged Leaders
      • Embracing the Rise of a Democratic Egypt
      • Protests in Afghanistan Turn Deadly for Coalition Forces and UN Personnel
      • Haiti: Another Failing Humanitarian Investment
      • What Karzai Can Learn from Calderon
      • START II: A Necessary, Easy Success that Nearly Failed
      • Why Does the U.S. Government Support Independence for the Breakaway Serb Territory of Kosovo but Oppose Independence for the Breakaway Georgian Territories of Abkhazia and South Ossetia?
      • Iraq's Electric Issues: When Human Wants Trump Economic Sense
      • The International Community Reacts to Wikileaks: We May Be Moving Toward a Third World War in Cyberspace
      • On Climate Gate
      • Assessing Obama's Afghanistan War strategy
      • 2009 Iranian Presidential Election: The Fallout
      • Resolving Sri Lankan Conflict through Free Media
      • What are the Global Consequences of Russia's Invasion of Georgia
      • The War in Iraq: an assessment of President Bush's surge strategy
      • Drug War: Actions of Venezuela, Columbia, Ecuador in terms of Resovereignization
      • Is the Iraq Refugee Crisis America's Responsibility?
      • US support for a united Kosovo, Abkhazia, and South Ossetia: why?
      • Should the US withdraw from Iraq?
      • Setting a Timetable for Troop Withdrawal from Iraq is a Terrible Mistake
      • War on Terrorism is needed
    • Law and Order >
      • Rape in the US Military
      • Ethics of Force-feeding Guantanamo Bay Detainees
      • Reacting to the Aftermath of the Tucson Massacre
    • Economy >
      • Affordability Drives Fear of Obamacare and the Individual Mandate
      • Is the Economy Built for a Job's Recovery?
      • Gutting Healthcare Reform of the Individual Mandate
      • Arizona Budget Cuts Lead to Lethal Healthcare Rationing:
      • Shameful Collection Practices of American Banks
      • The Fed Reveals it Actually Undertook an International Bailout
      • Thoughts on French Budgetary Reforms
      • Seniors Start Businesses
      • The Case for Slimming Down the US Military to Make it Better
      • Looking at the Obama Administration's New Approach to Economic Policy
      • Should the Government Regulate the Credit Card Industry?
      • The Big Three's Big Chance
      • The Unhealthy Tone of the Healthcare Reform Debate
      • Should the federal government offer a bailout for home owners?
      • Environmentalists: Do They Do More Good Than More Harm?
      • Responding to Scott Walker's Contribution to the War on Unions
    • US Government >
      • America Needs to Focus on the Impending Fiscal Crisis
      • Reacting to the Bush Era-tax Cut Extension Deal
      • Quitting the Obama Revolution: The Fickle Nature of American Politics
      • John Boehner's Circus
      • Is the Fed Putting Itself in Jeopardy?
      • Wikileaks Goes After the US State Department
      • Discussing the Political Environment Surrounding the 2011 Budget Debate
      • What the Democrats Can Do to Ensure a GOP Year in 2012
      • What the 2010 Midterm Actually Said
      • Congresswoman Kathy Dahlkemper
      • Democrats Minus Nancy Pelosi Equals Opportunity
      • Terrorists Go Postal: The Terrorism Threat Reexamined
      • Victory in the 2008 Election: Reaction to Barack Obama'a Win >
        • Expectations for Barack Obama
      • President Obama's first one hundred days
      • John McCain's Negative Campaign
      • Reasons People did not Elect John Mccain
      • History judges the George W. Bush Administration
      • Should the next US President focus on domestic issues?
      • President Bush, should he resign or be impeached
      • Should the Ban on Government Sponsored Assassinations be Repealed
    • Off Topic >
      • A Face of America’s Greatest Generation
      • A Story About a Man Who Made the World a Better Place
      • Making the World a Better Place
      • The Bipolar Ethical Nature of Google
      • Learning Computer Plays Jeopardy
      • Verifying Medicine is the Real Thing
      • Taking a Practical Step Forward in Optical Computing Using Slow Light
      • Scientists Take a Closer Look at How Lithium Batteries Work
      • Remarking on the First Blizzard of the 2010-2011 Winter Season
      • Driving in the Snow: Acceleration is the Key
      • How People in Northwest PA Are Coping with the Increasing Cost of Oil
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