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Thursday, March 8, 2018

What Does Flexibility on Tariffs Mean?

Tariffs are a type of tax that ensures foreign products cost more and American products are competitively priced. This is more likely if our industries are not competitive. Flexibility on Tariffs does two things 1.) maintain free trade for those who did not violate concepts of fair practices and 2.) protect the industry to develop.

Flexibility is important when America has a long-term past precedence of promoting free trade. Yet there is a solid argument that some countries have taken advantage of that free trade good will. Therefore, a higher level of tariffs on abusive countries that engaged in "dumping" could be justified as a punitive measure to ensure countries have a stake in playing it fair.

You must also consider that tariffs are only good when they allow already working industries to quickly pick up their competitive position through new investment, innovation and reform. Without a quick change in their position they will need these tariffs for a long time and that could force them to be further non-competitive through lack of reforms.

Flexibility is important here because with legislation there is often a time frame and a "one shoe fits all" approach. The situation on the ground changes often, percentages need to change to ensure industries are not being overprotected from change, and adjustments are made for existing concerns of allies. I'm more of an advocate for free and fair trade where bad actors are punished but the overall process of open markets continue forward to a more united world with higher economic growth that improves people's lives.

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