U.S. Presidential Campaign: Issues – Trade & Tariffs

Written by  //  July 31, 2008  //  Public Policy, Taxation, Trade & Tariffs, U.S.  //  No comments

Taxing the Poor
Edward Gresser (Foreign Affairs) … most imports arrive not under FTAs but through the permanent tariff system, which receives far less attention in Congress. Rather than raising money and protecting jobs, permanent tariffs tend to increase clothing and shoe prices at home while creating especially high trade barriers that deter goods from approximately twenty poor countries across Asia and the Muslim world from entering the U.S. market.
The perversity of the tariff system, of course, is not the only trade question the presidential candidates should be debating. Senators McCain and Obama should be asking how the United States can remain competitive as Asia rises? How will the U.S. food-safety and consumer-safety systems, set up for the 1970s, adapt to the multinational supply chain? Which industries and countries should our trade negotiators target as the main export opportunities? How should trade policy relate to foreign policy and strategy? And what is the best way to help workers adjust to competition and communities deal with mass layoffs? These are all reasonable and strategically crucial questions to ask. Unfortunately, the correct responses are far from obvious. By contrast, a closer look at our tariff system would raise a question which is much easier to answer: should we really be taxing cheap shoes and clothes?

Edward Gresser is Director of the Progressive Policy Institute’s Project on Trade and Global Markets.

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