Subject: Re: CBS Interview With Warren
If we offset carbon with a fee or tax, why not offset really low wages with a tariff?

We know from the last round of tariffs that no jobs were onshored, everybody just paid higher prices. Perhaps if the tariffs were in force for a longer period of time we would have seem some onshoring, but that seems long a long, hard row to hoe.

I've seen two proposals to counter some of the problems you outlined in your post. One is that we only make free trade agreements with countries with industries that pay a living wage in that country. The other is wage insurance. I'm not aware that either of these have been applied in any large scale. But they seem like rational approaches.

That said, the current US unemployment rate is about 4%, which most economists believe is close to the theoretical minimum. I'm very skeptical that even with tariffs there will be any onshoring unless and until unemployment rises to the point where wages are bid down to developing nation status. Which I don't think would be a victory.

However, we know from statements from US government leaders the tariffs seem to be about mercantilism more than jobs. For example, the US has a trade deficit with Canada, and US officials have indicated they believe this means the US is subsiding Canada. Similarly, official claims that the EU was created to rip off the US, etc.

But economists dating back to David Hume have argued that the key isn't how much you export, it is how much money you make. So, if we can import Canadian aluminum cheaper than we can make it ourselves, then we should import every ingot we can.*


*In a strict financial sense. There might be other considerations like jobs or strategic supplies. But the current administration is mostly framing trade in strict win-loss terms.