Join the new world

Congress has been debating the elimination of tariffs during the past several weeks. Proponents of the policy argue sometimes argue that unimpeded imports of all goods into the eUS would provide competition for domestic companies that would put inefficient ones out of business and increase the efficiency of the eUS economy. They argue that "free trade" is absolutely good on an international scale and that the eUS ought to set an example to encourage other nations eliminate their tariffs. They assert that eliminating tariffs would lower the prices of products on the eUS market. When these arguments began to lose their persuasiveness, the proponents created a new argument. If tariffs were eliminated more goods would enter the eUS market, and this would increase our military power. (I will not even try to explain that one.)


Opponents of such extreme measures claim that they would, by allowing foreign companies to sell cheaper goods here, make it impossible for eUS businesses to survive. For those businesses able to survive, lower raw material and finished goods prices would force employers to lower wages. Lower wages would, in turn, reduce the income taxes that support the military.


The Overlooked Danger

Both sides of this argument have one thing in common. Their arguments are purely economic. Neither side has considered the potential international political consequences of the elimination of tariffs. To the extent that these possibilities have been mentioned, it has been to dismiss them as insignificant. Far from being insignificant, these potential consequences could pose significant threats to our national security.


The primary danger of this failure is the possibility, even probability, that companies based in other nations may decide to sell RMs in the eUS market at prices domestic companies could not compete with. Even if the proponents of "free trade" are correct that standard foreign competition would not produce such an outcome, there is the possibility that foreign governments would use our unprotected status as an opportunity to initiate economic warfare. A small government payment awarded to companies willing to export solely to the eUS would make it possible for those companies to export goods to the eUS at prices low enough to undersell all eUS companies. Domestic companies would then be forced to lower prices and wages to compete, with the effect of decreasing wage levels. If such undermining of prices continued, business will fail, reducing the number of jobs in the US and encouraging eUS citizens to move to other nations to find good-paying jobs.


Such a development would also endanger us militarily. We would lose population, thus reducing the level of our defenses. We might find ourselves dependent on companies based in other countries to provide us with essential raw materials. In an unstable world dominated by war and PTOs, no nation can be counted on to remain an ally. The next battle or the next election might suddenly turn an ally into an enemy. If the eUS is heavily dependent on raw materials imported from that market, we would suddenly lose our access to it.


That this danger is not beyond the realm of possibility is demonstrated by the fact that some "free trade" advocates in the eUS Congress have suggested undertaking a form of economic warfare to "persuade" reluctant nations to eliminate tariffs. They want to embargo (prohibit a nation from trading with us) those nations until they agree to eUS style "free trade". It is not a great leap to imagine that unfriendly nations might choose systematically to undersell our entrepreneurs as a means of bending the eUS to their will.


I do not know that such a possibility would occur. But it is a risk I do not want to face.


seeker1 for Maine