John W. Miller reports in yesterday's Wall Street Journal that countries all over the world are enacting trade barriers to protect some of their key industries. Russia is the worst. Since November Russia has introduced 28 measures to raise tariffs on other countries' imports and subsidize its own exports, and plans six more. Global trade grew by 6.2% in 2008, but is now predicted to shrink by 2.1% this year. 153 nations belong to the World Trade Organization. Russia isn't one of them.
The European Union has warned U.S. Democrats not to implement proposed "Buy American" provisions in their planned new "stimulus" spending. The E.U. itself is resuming subsidies to dairy farmers' exports, and barring Chinese screws and bolts.
The U.S. is planning tariffs on Italian water and French cheese to punish the E.U. for resticting imports of U.S. chicken and beef. India plans to increase tariffs on foreign steel. Egypt has imposed duties on sugar. The U.S. has imposed tariffs on Chinese mattress springs and graphite electrodes.
History is clear: protectionism only makes a world-wide recession worse. Those who do not study history are doomed to repeat the mistakes that have been made in the past.
1 comment:
Reading history is vital to predicting the future because we don't learn from the past. There's always that old well we'll do it right this time. And of course "they" never do.
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