Tariffs are going into effect now.
This article talks about the effects that the Smoot-Hawley Tariffs had upon the Great Depression and its severity.
China clearly should be held responsible for their theft of intellectual property. It has been going on for far too long. Many of the great inventions of the last century were developed in the United States – steel, computers, cars, electronics, software, cell phones, etc. Why should others be free to steal those inventions? There is, though, a right and a wrong way to go about stopping it.
Like personal scrimmages, there is a high tendency to strike back by those who feel they have been harmed. Escalating the fight to also include friends just leaves the combatant with no allies. This tit-for-tat back and forth can bruise and batter all players. Even worse is when this type of confrontation results in significant collateral damage to a huge amount of organizations and people (externalities). Just like the agency problem in business, one gets the benefit and many pay the price.
The pugnacious and heavy-handed style of President Trump’s “negotiations” may get him what he wants – eventually. But, who and how many will pay a high price for this personal crusade?
“Those who don't study history are doomed to repeat it.”
