A great read for students of economics and politics:
““If you try to
understand how so many jobs have disappeared, the answer that you come up with
over and over again in the data is that it’s not trade that caused that — it’s
primarily technology,” says Harrison. “Eighty percent of lost jobs were not
replaced by workers in China, but by machines and automation. That is the first
problem if you slap on tariffs. What you discover is that American companies
are likely to replace the more expensive workers with machines.”
The other problem,
Harrison points out, is that a lot of what the U.S. exports is dependent on a
supply chain that uses components produced cheaply elsewhere. “So if we slap
tariffs on Mexico and China, it will make our own manufacturing less
competitive,” she says. Starting a trade war with Mexico, China or both would
mean that “the most likely immediate consequence is that they are going to turn
around and play the same game by putting tariffs on things we produce for the
world, so Mexico would likely slap tariffs on our agricultural exports, which
are massive, and China would put a tariff on highly sophisticated machinery. If
that escalates you end up in a situation where the economy is worse off.””