Forbes, Laffer ask Trump for Zero tariffs, Zero Subsidies, and Zero Barriers

In a letter to Trump, the Committee to Unleash Prosperity seeks zero tariffs. There were several notable letter signees.

Steve Forbes, Arthur Laffer, Fred Smith, and Stephen Moore on the Committee to Unleash Prosperity ask Trump to seize the high ground and give U.S. firms an advantage.

Please consider the WSJ Op-Ed Mr. President, It’s Time for Zero Tariffs.

Congratulations on the new U.S., Mexico, Canada Trade Deal. By keeping trade barriers as low as possible across North America, this USMCA will benefit businesses, workers and consumers in all three countries.

We are writing to recommend that as you continue to negotiate new trade deals with our other allies, you pursue the endgame goal of zero tariffs. You have said on several occasions that your objective is not protectionism but to create “a level playing field” on trade. You have even suggested to our allies on several occasions that both sides “drop all Tariffs, Barriers and Subsidies!”

We hope that you will continue to push this solution with Britain, the European Union, South Korea, Japan, and other allies. The “zero for zero” offer should include three components: zero tariffs, zero subsidies and zero nontariff barriers. The last has been a big problem for American companies in penetrating many foreign markets.

This will help American businesses expand markets overseas and create more jobs and wealth both abroad and here at home. Zero for zero on tariffs will give American companies an advantage because, as your own Council of Economic Advisers reports, the average American tariff is 3.5%, while the average EU rate is 5%. China’s is nearly 10% and the world average is around 10%. On a level playing field, American companies and their talented and productive workers can compete with anyone, and U.S. exporters—from farmers to manufacturers to tech firms—will benefit enormously if trade barriers are abolished.

Strategically, offering the carrot of zero tariffs will allow America to seize the moral high ground in the trade debate. It will also put the U.S. in a stronger position as you negotiate with China to end some of Beijing’s most abusive trade policies.

I endorse that letter 100% while adding. the US should do this regardless of whether any other nation follows. Business and jobs will flock to the first nation that does so.

Addendum

Disappointing comments from readers who believe in tariff parity.

Increasing tariffs because another nation does is pure silliness. It is tantamount to saying if another country does something stupid, we need to be stupid as well.

Tariffs are a tax on consumers and importers of usable goods such as steel. If China is subsidizing steel it is to the benefit of US manufacturers who use steel as well as consumers who pay lower prices for goods.

It is absolutely correct to reduce tariffs, regardless of what other nations do, on that basis alone.

Production and jobs will flow to the US if we eliminate tariffs. Consumers gain from lower prices, and even our exporters who use intermediate goods (again steel is a prime example), benefit.

Mike "Mish" Shedlock

Comments
No. 1-20
Advancingtime
Advancingtime

Trade policy has massive long-term ramifications on the strength of a nation's economy. Often people fail to note the difference between free and fair trade. In many ways, the global economy has become an ill-regulated business model tilted to favor big business and giant conglomerates. We should not lose sight of the fact that while free trade is important, fair trade is far more so and should be the main issue.

Nationalistic exploitation of trade agreements has occurred throughout history and it is naive to think such schemes will suddenly end. Developing a long-term sustainable economic system that is balanced would also contribute to global cohesion and the world economy. The article below delves into how the promise of widespread prosperity from trade has fallen short with benefits flowing to a limited few.

Realist
Realist

Stuki; be succinct!

Realist
Realist

Mish. I completely agree with you on this topic.

Dsgn
Dsgn

I would like to see ConGress working on a one page trade law: "Effective in 60 days, all laws affecting trade in any way are hereby repealed." The back would have a watermark: "This Page Intentionally Left Blank."

But that couldn't work alone. Along with that sort of open borders for trade, people would want to cross too. So to make sure the immigrants want Freedom - not Free Stuff - every aspect of the welfare state - anybody receiving big.gang.guv money - would have to end. All of it.

But since fiat / fractional reserve bankstering prevents saving, that would have to end too. What an extraordinarily complex puzzle. :)

Those (now) immigrants would want to / have to work, and small biz is the real engine of jobs, so we would have to repeal all tax laws, because by their nature they favor big.gang.biz and Fascism. Bezos can't have His Billions with armies of minimum wage slaves without favorable tax laws and the welfare state making it possible.

The Collective Farms created by the Bankster class of the 1930's will end suddenly with the advent of a petrol or credit crisis anyway, so all laws favoring them would have to be repealed. Small farmers will either take them over in abandonment, or like the foreclosing Banksters of the 30's, for pennies on the dollar.

Denninger has the "heath crisis" covered, the other leg of the BigMAC (the Big Medical Agribiz Complex), so tell ConGress "Just do it!"

Gee, if we repeal the entire United States Code, this begins to look like 1785, when the people had ZERO connection with a tiny trade association between states - funded by tariffs(!) - called the United States.

JL1
JL1

NOT having a wall is an existential threat to USA and Americans and without a wall illegal immigrants and drugs flow to USA.

ACA removal is issue which only excites small numbers of Republican activists. Trump already removed the forced mandate so nobody is anymore forced to buy Obamacare coverage.

Trump has now even started saying that pre-existing conditions coverage will be protected.

The problem with ACA aka Obamacare is that it tried to fix an insurance problem of getting everyone insurance when the problems in insurance are just the symptom and the actual problem is cost of healthcare which is high because lack of competition.

If the cost of healthcare dropped then most people could pay cash for healthcare not needing insurance and if they wanted insurance it would be much cheaper.

Denninger has written a good list how to fix healthcare problems:

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