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Richmans' Trade and Taxes Blog
Steven Pearlstein calls for direct action against mercantilism
In a June 30 commentary (Steering U.S.-China economic relations toward a new normal) Washington Post business columnist Steven Pearlstein argues that we need to take real action now to end mercantilism, beginning with Chinese mercantilism. The entire commentary is worth reading. Here are just his action steps:
In this commentary, Pearlstein hits on several of the key points that my father, son and I made in our 2008 book Trading Away Our Future:
Although Pearlstein doesn't discuss specific proposals, we do. After writing our book, my father came up with one that would be simple, yet effective: an across-the-board tariff on mercantilist countries' goods whose rate is proportional to our trade deficit with that country. The rate would come down as the mercantilist governments remove their barriers to our products. The increased demand for American products, resulting from them taking down their barriers, would lead to increased investment in American manufacturing.
Journal of Economic Literature:
Atlantic Economic Journal: