The Idiocy of Protectionism

[Nederland]

http://www.economist.com/blogs/lexington/2009/09/the_idiocy_of_protectionism.cfm

<snip>

FORD makes transit vans in Turkey, with passenger seats in the back. When the vans are shipped to America, the brand-new seats are immediately torn out and recycled.

Why? Because 46 years ago, Europe slapped tariffs on American chickens. America retaliated with a tax on European commercial vans.

To get round this, an American firm's European factory adds passenger seats to its commercial vans so they can be classified as passenger vans, which attract a lower tariff. Then it trashes the seats once the vans are safely landed in Baltimore.

<snip>



I wish Obama understood just how stupid protectionism is in the long run...

[ingac70]

1. The lack of jobs in today's economy....

shows just how stupid it was to NOT be protectionist.

[Warpy]

2. Targeted protectionism like that is always stupid

but a lack of protectionism when we're dealing with highly protectionist countries like China and India is truly insane.

Free trade without fair trade has brought this country's people to their knees.

Or hadn't you noticed?

[Nederland]

4. Targeted protectionism

Is precisely what Obama has engaged in.

[BobRossi]

3. Then the law should be changed.

Tax the living shit out of EVERYTHING coming in from protectionist countries.

[Nederland]

5. Hmmmmm

I wonder how they would respond?

Tariffs do one thing: reduce trade. All trade. Imports AND Exports. If you are opposed to trade, you should be in favor of tariffs.