Letter to Editor - trade deficit a self-inflicted wound
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Manufacturing News, Source : The Manufacturer US
Published : 25 Jun 2007 14:51
David Blond ("Dependence and decay", June 2007) raises a very valid issue about the dangers of the ever-growing US trade deficit, but he expresses being mystified over the reason.
Although we are constantly told that it is the result of "inevitable globalization", our import maximization is actually a highly engineered government policy, whereby all of the governmentally imposed conditions of trade heavily encourage imports relative to exports. Our imports pay an average tariff of 1.3 %; our exports face an average of 40 %. We impose almost no non-tariff barriers; other countries have a withering array. We do not use border-adjusted taxes either to susidize exports or to tax imports; at least 148 other nations do both--including those with whom we supposedly have "free trade" agreements. Our government taxes the profits of plants owned by US corporations as they are earned if the plants are in the US, but not if they are abroad. This is but a partial list. The trade deficit is no accident. It is a self-inflicted wound.
We are in fact practicing not "free trade" as advertised, but reverse mercantilism, by which imports are encouraged over exports.
George W. Shuster
Chairman President and CEO
Cranston Print Works Company
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posted by Ross R on Mon 2 Jul 07 19:59
Mr. Blond is absolutely right in questioning our trade policies. When the value of the Chinese currency is undervalued between 20 to 40 percent, among other anomolies in trade policy, then we have serious issues. We talk about free trade when we should be focused on FAIR TRADE.
Ross Robson