Trumpled (Alternative Leading)

[sydneybluesfan]

The huge off shoring of jobs especially in the US has resulted in working and middle class real wages stagnating over the past twenty five years at least and a huge loss in tax revenue. I'm not a fan of Trump but if you think current global trade liberalisation practices are designed for the net benefit of the average Joe well best of luck.

This is undoubtedly a pandora's box discussion - but there are always going to be winners and losers in any economic policy and depending on where you sit on that spectrum will inform your view. Under free trade high cost / low quality industries often struggle and will eventually close [eg the car industry here], but the flip side is that export markets for efficient or high quality goods or services open up and expand. If you work on line at Ford you probably think it sucks, but if you work on the line at Blackmores you are cheering.

But in both cases you can drive home in a cheap car and watch your LCD panel that you bought online from Kogan for $300.

I think in western societies we also tend to forget that trade liberalisation has significantly increased the economic wealth of 3rd world countries and pulled millions [billions] of people out of abject poverty over the last 50 years. And again your view on whether working for a $1 a day in a Bangladeshi sweat shop is better than a mud hut and a subsistence lifestyle depends on your world view.

The issue for me is that the 'problem' of high unemployment in certain sectors or regions [remembering that the overall rate is 4.9% - historically low] and real wages you mentioned will both be made worse under a high tariff regime because a/ prices for the $500b of stuff the US import will go up so consumers pay more but their wages will stay the same, and b/ existing export markets will be made more difficult to access due to the retaliation allowed by the WTO. So prices go up, and unemployment also goes up - how does this help the average Joe??