• World News
  • Politics
  • Stock
  • Investing
  • Editor’s Pick
Time And Sales Reporter
Editor's PickInvesting

Should the US Respond to “Unfair” Trade Practices?

by January 31, 2025
January 31, 2025

Jeffrey Miron

globalization

In September 2024, the Biden administration implemented a 100 percent tariff on Chinese electric vehicles (EVs), citing concerns over China’s subsidies of its EV industry. These subsidies, the administration claimed, allowed Chinese manufacturers to sell vehicles at artificially low prices, putting US automakers at a disadvantage.

This example illustrates a common justification for tariffs: that other countries engage in “unfair” trade practices, such as subsidizing their manufacturing firms. This claim is likely overstated; in many cases the costs of production are lower in poorer countries because labor costs are lower, even adjusting for skill levels.

But some countries do subsidize particular industries, which allows them to sell at lower prices relative to US producers. India provides favorable loans and tax breaks to its sugar industry, while the EU’s Common Agricultural Policy offers direct payments and market interventions to its farmers.

Is that a good reason for the US to impose tariffs on these countries?

No. Subsidies for particular industries harm the countries that adopt them by distorting the allocation of productive activity and forcing residents to pay higher taxes. But such policies benefit the United States overall: while some workers see less demand for their services, the US purchasers of the subsidized products face lower prices, and this stimulates demand, allowing for job creation instead of loss.

Historical evidence supports this: in the five years following the passage of NAFTA, which eliminated most tariffs and trade barriers between the United States, Mexico, and Canada, the unemployment rate fell to below 4 percent while the number of manufacturing jobs increased by half a million. Likewise, estimates from the International Trade Commission and the Peterson Institute suggest a modest positive impact on the labor market and the economy more broadly from the agreement.

If other countries want to “throw money out the window,” the US should stand under that window.

This article appeared on Substack on January 31, 2025. Jonah Karafiol, a student at Harvard College, co-wrote this post.

previous post
First American hostage to be released from Gaza, Hamas says
next post
Journavx: A Promising Opioid Alternative, but Not a Silver Bullet

Related Posts

Trump implies government could cut contracts and subsidies...

June 8, 2025

Procter & Gamble to cut 7,000 jobs as...

June 7, 2025

Crypto Market Recap: Strategy Eyes US$1 Billion Capital...

June 7, 2025

Ford Government Pushes Bill 5 Through Legislature, Sparking...

June 7, 2025

Hempalta Provides Strategic Update Regarding Equipment Sale and...

June 7, 2025

Top 5 Canadian Mining Stocks This Week: Africa...

June 7, 2025







    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.




    Recent Posts

    • Trump implies government could cut contracts and subsidies to Musk’s companies

      June 8, 2025
    • Week Ahead: NIFTY’s Behavior Against This Level Crucial As The Index Looks At Potential Resumption Of An Upmove

      June 8, 2025
    • Tech ETFs are Leading Since April, but Another Group is Leading YTD

      June 8, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 8, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 8, 2025
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 timeandsalesreporter.com | All Rights Reserved

    Time And Sales Reporter
    • World News
    • Politics
    • Stock
    • Investing
    • Editor’s Pick

    Read alsox

    10 Reasons to Cut Corporate Welfare

    March 6, 2025

    Friday Feature: The EdChoice Friedman Index

    April 4, 2025

    “Repeal the Tax Exclusion for Employer-Sponsored Insurance to...

    January 24, 2025