Trump's tariffs on metals costs Ford $1 billion, CEO says
But like war, sometimes these actions are needed. The question is whether this is such a time. I think it is because we are embarking on the creation of a new socio-economic model. We need to reform the old structures like trade, tariffs, and trade barriers to pave the way for this change. Many of the economics professors are in a snit about this. They rightly point out that these tariffs hurt the people, but change often requires an amount of pain. The reason we ultimately accept this is because we find the long-term gain worth the short-term pain.
One would think that these economists would be able to see this point, but that is never the case. I have argued this point as the Ma Bell Effect. The Ma Bell Effect resulted from an antitrust action against Ma Bell in the early 1980s. The court ruled that Ma Bell had to be broken up and the choice was laid whether Ma Bell would keep long distance and the Bell Labs (and some other stuff) or the local Bell companies. Long distance charges had long been the cash cow in the Bell system, so Ma Bell kept the cash cow.
The problem was that as soon as the Judge broke up the Bell system and allowed new competition, all of the experience and knowledge the Ma Bell "experts" became out of date. So, Ma Bell had experts whose expertise was apropos of nothing. The relied on their experts because that is what companies do with predictable results. Ma Bell, er, AT&T, collapsed when new competitors built out fiber optic long distance which took all of the data and allowed these competitors to let voice piggyback for ever diminishing rates. This is why long distance is now free.
Our economics professors are experts in the economics of the current socio-economic model but know nothing of the new, no one does. As such, their expertise will always lead them astray. Socio-economic transitions are fraught times since no one knows anything and change occurs in an uncontrolled fashion.
Trump is not using tariffs to protect US businesses and workers from competition, but to open the rest of the world to less restricted trade. This will, in the end, benefit the entire world including the US. There will be short-term pain, but there will also be long-term gain. I am not interested in the economists whinging and kvetching.