By admin       2018-09-24

The tariff background came about as the U.S. essentially opened all of its textile and apparel doors to China. This was generally true for most goods. The trade agreement was that U.S. manufactures would have reciprocal access to China’s consumer markets. China flooded the U.S. with goods, and still does. However, the Chinese never allowed the U.S. to ship goods into China, which created a one-way trade agreement. Additionally, U.S. seed firms were to be allowed to sell seed (technology) to China. Yet, China prohibited U.S. based seed companies any access to their market. On academic and business trips, Chinese scientists and other travelers obtained patented seed and smuggled them out of the U.S. and into China. While U.S. seed industry spent billions in seed development cost and decades of time, the Chinese made seed available with limited research and expenses. Economists love to spout off about the wonderful benefits of free trade. Yet, when putting the textbook aside, one realizes the multitude of assumptions made by economists so we can all enjoy the beautiful benefits of free trade. In today’s business and investment world, “there is no free trade and there is no free lunch.” Typically, so the textbook tells us, one would favor free trade and most do. However, free trade comes with a flower basket full of assumptions of perfect knowledge. Just as perfect knowledge does not exist in any economic setting, neither does free trade. Free trade is a utopia. I love it, but then I recognize it will never happen.

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