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Job losses
But what about the impact of tariffs on job creation? Surprisingly, an increase in import taxes has been found to result in slightly more unemployment across countries.
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An example provided by Irwin at Dartmouth College points to one plausible explanation — and it has to do with the steeper cost of imported goods.

“A number of studies have shown, on net, we lost jobs from the (2018) steel tariffs rather than gained jobs because there are more people employed in the downstream user industries than in the steel industry itself,” he said.
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A study by the Federal Reserve Board found that a rise in input costs resulting from US tariff hikes in 2018-19 led to job losses in American manufacturing. The damage from those higher expenses was compounded by retaliatory taxes on US exports, more than offsetting a small boost to manufacturing employment from US tariffs — at least so far, the 2024 paper said.

Retaliation by other countries is indeed another danger of pulling the tariff lever. Higher tariffs on American exports would typically raise their prices for foreign consumers, hitting demand for the goods in many cases.

When Trump announced new tariffs this year, America’s major trading partners were quick to strike back with their own levies, although the US then agreed a temporary truce with China and the European Union.

Costs of free trade
While economists generally agree that free trade has benefited the global economy in recent decades, they acknowledge that it comes with certain costs.

One is the loss of jobs in communities that are particularly exposed to new competition from foreign manufacturers.

That is similar to the impact of technological progress on workers. “Manufacturing jobs as a share of the labor force have come down everywhere. It isn’t a US-specific story,” said Gimber at JPMorgan Asset Management, pointing to automation.

He drew a parallel between helping workers affected by higher imports and what is known as a just transition — the idea that the drastic changes needed to move toward a greener economy should be fair to everyone and minimize harm to workers and communities.

In both cases, providing workers in impacted industries with new skills or retraining them could be key, Gimber said.

Another potential cost of free trade is dependency on far-flung manufacturers. That took on new relevance during the pandemic, which snarled global supply chains, contributing to shortages of products such as face masks and respirators in the US and elsewhere.

However, economists do not typically see tariffs as a good way to build up domestic manufacturing, Fatas at INSEAD said, noting that subsidies for specific industries are viewed as a better tool “because they work more directly.”

But perhaps the strongest argument in favor of free trade is its importance to maintaining peace between nations.

As Gimber’s colleague David Kelly noted in March, closer trade relations give countries more to lose in any conflict.

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Trump's call for a protest crackdown has been a boon for Chinese propaganda
Analysis by CNN's James Griffiths
Protesters running amok. Innocent citizens under siege. Outside actors engaging in terrorist acts. Police struggling to maintain control and in desperate need of reinforcements.
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That was how Chinese state media portrayed anti-government protests in Hong Kong last year, dismissing calls for greater democracy and an investigation into police brutality by focusing on individual acts of violence and property damage.
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Throughout the protests, the US was consistent in its support of people’s right to take to the streets and have their voice heard. Facing widespread unrest and public anger at home in the wake of the death of George Floyd, the reaction from US President Donald Trump appeared markedly different.
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On Monday, Trump called for the military to be deployed to “dominate” protesters, and demanded states do more to stem “acts of domestic terror.”
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The irony has not been lost on Beijing, which on Thursday marks (or rather doesn’t, the date is highly censored) its own military crackdown on anti-government protesters on June 4, 1989.
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“Washington’s promise of equality and justice for all in the country has remained hollow at best,” state news agency Xinhua said in a commentary titled “The coming suffocation of the American dream.”

“Amid the ongoing anti-racism protests in the country, decision-makers in Washington, instead of trying to sooth the pain and anger of the public, have been fanning the flames, calling protesters ‘THUGS,’ and threatening them with ‘the most vicious dogs, and most ominous weapons,” the commentary said.
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China Daily, a state-backed newspaper, noted that “The US, after the killing of Floyd, seems to be on fire, and troops have been mobilized to subdue angry demonstrators.”

“This is certainly not what the world expects to see in a country that is the world’s sole superpower,” it added. “But that sadly is the reality of the US.”

This rhetoric isn’t just embarrassing for Washington, it’s also a sign of how the US may find its influence damaged by a perceived hypocrisy over human rights at home and abroad.

Earlier today, Hong Kong’s leader Carrie Lam pointed to the unrest in the US as evidence of Washington’s “double standards.”

“They attach great importance to the national security of their country, but look at our national security through tinted spectacles, especially the current situation in Hong Kong,” she added.

The ability of Washington to influence Beijing’s position on Hong Kong – which is in part founded on fear of outside influence in the city – was already severely limited. The Trump administration’s reaction to protests at home may have hurt its position even further.

https://graph.org/Launching-Your-Consulting-Business-in-Dubai-A-Strategic-Path-t
o-UAE-Success-05-07

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