The Red Dragon

12/26/2016

The rise of the Donald Trump Administration brings about an interesting twist to the economic landscape.
Dominated by power-hungry expansionary globalist entities for decades: It would appear that the emaciating American people have finally had enough and are now demanding change to the status-quo.
It was natural; the eternal search for cheaper resources all in the name of prosperity. Maximize shareholder value, minimize costs, why pay an American worker a living wage when you could get the ‘same product’ for pennies on the dollar exploiting slave labor found cheaply and abundantlly across the sea? The politicians certainly encouraged it.
Unfortunately, everything has limits. The American people; once prosperous, dynamic, thriving, today find themselves languishing, low wages, depression, unable to purchase the very same products they once proudly manufactured..

Tariffs

Tariffs have a long complicated history in American politics & economics.
Once, the main source of all Federal revenue (as high as 95%.)
Today: imported goods subject to tariffs in America are at a historic low.

USA Tariffs: Historical Timeline

As a newly formed nation, American industry could not cost-effectively compete against the substantially lower prices of established old-world European empires such as Great Britain. The tariff, effectively 'protected' American labor and business interests, serving as an economic buffer as well a revenue stream for federal government.
Tariffs were effective in achieving this goal. Perhaps, the industry that found the greatest success was the steel industry.

To the extent tariffs raised steel prices, they paid much more making possible the U.S steel industry's massive investment to expand capacity and switch to the Bessemer process and later to the open hearth furnace. Between 1867 and 1900 U.S. steel production increased more than 500 times from 22,000 tons to 11,400,000 tons and Bessemer steel rails, first made in the U.S that would last 18 years under heavy traffic, would come to replace the old wrought iron rail that could only endure two years under light service.[43] Taussig says that in 1881, British steel rails sold for $31 a ton, and if Americans imported them they paid a $28/ton tariff, giving $59/ton for an imported ton of rails. American mills charged $61 a ton—and made a huge profit, which was then reinvested into increased capacity, higher quality steels and more efficient production.[44] By 1897 the American steel rail price had dropped to $19.60 per ton compared to the British price at $21.00 - not including the $7.84 duty charge - demonstrating that the tariff had performed its purpose of giving the industry time to become competitive.[45] Then the U.S. steel industry became an exporter of steel rail to England selling below the British price and during WW I would become the largest supplier of steel to the allies. From 1915 through 1918, the largest American steel company, U.S. Steel, alone delivered more steel each year than Germany and Austria-Hungary combined, totalling 99,700,000 tons during WW I.[46]

Economic Globalization

Everything changed after World War II.
The world was in ruins and there was a concerted effort to unify nations.
Trade barriers collapsed as the Western World unified under GATT (General Agreement on Tariffs & Trade.) GATT was signed by 23 nations in Geneva on October 30, 1947 and encompassed a 'substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantafeous basis.'
The agreement lasted for 47 years until globalization was taken to the next level.
The Uruguay Round Agreements of April 14, 1994 inked the WTO (World Trade Organization) and 23 nations became 123.