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  • Political Leaders' Latest Scheme: Big Taxes on U.S. Exports

    Several U.S. political leaders have recently reiterated their desire to punish countries that undervalue their currencies.

    News flash: Since June 7, 2010, the value of the U.S. dollar has fallen 17.3 percent.

    If the United States gives countries a green light to designate low currency rates as an unfair trade practice, which of these trading partners (above) would be the first to impose big tariffs on U.S. exporters?

    The potential U.S.-instigated trade war would not be without precedent, as Heritage expert James Carafano notes:

    The Smoot-Hawley Tariff Act of 1930 slapped duties on about 20,000 imports. Rather than spur consumption and production of American goods, it sparked an international trade war. By 1932, American exports to Europe were just one-third of what they had been in 1929. Worldwide trade fell two-thirds as other nations retaliated.

    Instead of policies that could lead to catastrophic trade wars, our country needs a trade agenda that protects the freedom of U.S. producers and consumers to engage in mutually beneficial transactions.

    Posted in Economics [slideshow_deploy]

    10 Responses to Political Leaders' Latest Scheme: Big Taxes on U.S. Exports

    1. OhoHistorian says:

      Those who do not learn history are doomed to repeat it is a quote that fits the whole Democrat party. Of course, they tend to try to rewrite it to fit their template (e.g. Roosevelt got us out of the Depression rather than extending it), but then the liberals tend to own the education establishment and educational books, so we cannot find out the truth of history through the education process at any level.

      BTW, liberals, don't bother commenting. Instead, search about the depression on this site and learn about it. Or maybe you would rather read about it at that conservative university, UCLA (http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx)

    2. Stirling, Pennsylvan says:

      oh great, make a trade war when the only thing benefiting from the feds easy money policy is the exports. 2012 can't come soon enough.. Can we just "Freeze" the government till then before they do anymore serious damage to whats left of the country?

    3. Tom, Okinawa, Japan says:

      Here in Japan the value of the dollar is down about 20%. Living on the dollar alone is very expensive. 100 yen is equal to about 81 cents. Cost of doing business is hard on American companies here. The military in Japan is also hit hard especially when pay is in dollars.

    4. Tom Georgia says:

      If our kleptoparasitic government policy makers wish to do something positive for our nation's economic producers then they should reduce government spending and then reduce rates of taxation across the board.

      Cost-of-taxation or cost-of-governments is additional overhead cost that our domestic producers must embed in the export prices that are to be paid by international customers.

      News bulletin: U. S. producers are very competitive with producers elsewhere in the world. The problem with which U. S. producers must contend is that U. S. governments are a financial travesty relative to the governments of the nations with whose producers our producers are trying to compete.

      U. S. produced goods are already the world's most highly taxed goods. U. S. workers are being taxed at the highest effective tax rates of any workers in the world. Of course, something of that nature has never stopped the ditzies that we tend to elect as policy makers.

    5. Leon Lundquist, Dura says:

      When Donald Trump says to impose a 25% Tarriff on China, he gave us the caveat that it was a Negotiating Starting Place! He would use the threat of Tarriff to get America a better deal! The point is, we would never get to the Trade War because China will relent! This is the Art of the Deal! You don't start by saying "We will give you anything you want!" That is as crazy as telling Qadaffi "We won't kill you!"

      Why on Earth do we prop up every Socialist Nation? We defend them all because Socialism doesn't work (even European State Socialism!) They can't afford to defend themselves! Europe is broke! Why? Socialism never works! The Progressives argue that Europe is so wonderful, but what is so wonderful about erstwhile Free Americans paying for everybody's defense except our own! Americans need defense from these idiots Socializing and Communizing us! We have camoflaged the hole, made Europe look good, all the while we let the appearance of right serve tyranny! I don't want the Government micro managing Americans! That is exactly what destroyed their Economies!

      We have paid Billions of dollars for 'Monetary Policy' but the Fed has given us a terrible Policy for our money. "Go quietly into the night!" Well, that's no policy! You can get bad policies for no cost at all! I think we should Nationalize the Fed! Seize all their assets and roll it over into the Treasury Department. Quantitative Easing is just another phrase for "We can steal anything we want! From anybody we want!" It is a High Crime to create starvation with Monetary 'Policy.' The Fed is a continuing High Crime against Humanity. The whole Gang belongs in prison!

    6. George Colgrove VA says:

      Why does it seem like as a nation – we are committing suicide?

    7. nealr says:

      What we need to do is change our tax laws. Change to the fair tax which cuts USA producers of products to '0' tax and put a sales tax on consumers. In theory, producer prices should decline and a sales tax will make the total cost the same as today. The bottom line is the the big hurt will be on China and other exporters to the USA that will have the equivalent of a new 35% tax penalty on what we import going to the US treasury. This should keep millions of jobs home in the good old USA.

    8. AD, CA says:

      Trade encourages economic growth.

      That which you tax you get less of.


    9. David Walter, Grosse says:

      This type of behavior is driving other countries to move away from the dollar as the world's reserve currency. When that happens, we can expect severe inflation since commodity prices will rise, driving up the price to us for manufactured goods. Even prices for food grown in the US would be expected to rise since they will have alternative markets in other countries. This rationale is driving the run-up in prices of silver and gold.

    10. James says:

      "Those who do not learn history are doomed to repeat it."

      Here is the history you do not know about the Smoot-Hawley tariff:

      The Smoot-Hawley was not a departure from normal US trade practice. Before it was passed US tariffs were among the highest in the world. If fact, the US was the most trade protected nation in the world and had been for more than a hundred years. The Smoot-Hawley tariff was NOT the highest tariff we ever had. The highest was the Tariff of 1828. Before the tariff trade was about 6 percent of GDP and it declined to 2 percent of GDP. While that is just one-third of was it was in June 1929 the decline was not due to the tariff. Smoot-Hawley became law in June 1930 but it did not collect a single penny of extra tax until it was implemented in June 1931 by which time most of the decline had already taken place. Smoot-Hawley did not last long. When Roosevelt took over in 1933 he began phasing it out. When the Great Depression got worse in 1937 it was long gone.

      From 1800 to 1900 US tariffs averaged 30 percent. During that time we prospered contrary to the myths of free traders. In fact all advanced economies became prosperous with high tariffs. When Great Britain tried free trade we eat their lunch with tariffs in the range of 40-50 percent. Just like China is doing to us now.

      Trade deficit nations win trade wars. We are a trade deficit nation.

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