🚧 Exports and Imports | Protectionism, Tariffs and Who Benefits From Them

Is exporting more important than importing? Who benefits from tariffs and protectionism? Is international trade "evil"?
Learn Austrian Economics in a fun way!
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Econ Clips is an economic blog. Our objetive is teaching economics through easy to watch animated films. We talk about variety of subjects such as economy, finance, money, investing, monetary systems, financial markets, financial institutions, cental banks and so on. With us You can learn how to acquire wealth and make good financial decisions. How to be better at managing your personal finance. How to avoid a Ponzi Scheme and other financial frauds or fall into a credit trap. If You want to know how the economy really works, how to understand and protect yourself from inflation or economic collapse - join us on econclips.com. Learn Austrian Economics in a fun way!

[@hyden7019]

The United States used to be the recipient of around 40% of Nigeria's crude petroleum. Then, we had new innovations such as hydraulic fracturing that allowed us to produce it at home at a more affordable price. In this case, had we enacted protectionist policies such as tariffs, we would not have been forced to innovate and pioneer new techniques. However, one issue that I would have with this manner of thinking is what if we face other countries such as China that enact their own protectionist polices? In that case, how should we react? The issue with the global market is that we can have a national market that is a free market but the global market is dictated by the whims of individual countries which means we are essentially opening up our free market to a non-free market.

[@jasontch3979]

Hyden even if China is protectionist USA should still remain free.

[@libertyordeath5630]

Exactly, free traders need to acknowledge that "free trade" is only a benifit when: 1) the trade is actually free on both ends and there is some sort of overarching authority with the power to keep it free on both ends. China is a good example of one way free trade. 2) the other country is not a likely current or even future threat to us or our national defense and security. Again free trade with china builds their military up and they are a threat. 3) the other country does not have a drastically different governmental or societal system or institutions. Again china is an atheist oppressive evil communistic dictatorship. Free trade would support and build up this disgusting evil system. Countries like Japan, South Korea, other European nations (excepting places like Russia) would be very good free trade partners if we could figure out how to build an overarching system that would fairly and honestly keep trade free on both ends. The problem is that you basically need a world government to keep it free between all partners. Unless every state in the world wants to ratify the U.S. constitution and join the union then I do not want any kind of political union with them...

[@frenchmarty7446]

Your question is essentially "What if other countries have different policies? Won't that hurt us?" Here is a two-part answer: 1.) A tariff is essentially a direct tax on importers. The only power China or any other country has is to tax their own citizens to protect connected interests. The only people directly hurt by Chinese tariffs are Chinese importers, US exporters are only an indirect casualty. Protectionism doesn't work any better in China than it does in the United States. 2.) If China raised tariffs on US goods, some American exporters would be hurt by no fault of their own. However, you can't help them by trying the same mistaken policy here and taxing American importers. The fact that China's mistake hurt Americans doesn't justify committing the exact same mistake in retaliation. Free markets work, regardless of what other countries do. It would be great if every country embraced Capitalism, but if they don't that is their loss.

[@frenchmarty7446]

@@commercialartservicesartwo3133 Nice poisoning of the well there, do you have any actual arguments to back it up?

[@frenchmarty7446]

@@commercialartservicesartwo3133 From deciphering your poorly written English, your argument is that: 1.) Tariffs penalize companies for moving to less regulated markets. 2.) Foreign companies can move their production to America. Ok, but who the hell cares? Your arguments assume you're already a protectionist of some kind or another. You're just begging the question.

[@rucjos]

Wow, I was stuck on this concept for like an hour. You beautifully dumbed it down for me. Subscribed!

[@kendreamer6376]

Good job econ Clips you basically see the economy the same way I do. Money just make bartering easier.

[@RichieAlton]

Its true, my current massage therapist needed a logo and instead of $250 i asked for a few $80 (value) of massage therapy. Works for me and last longer over 6 months than that $250 would have.

[@natsha4487]

Very informative channel and good animation 😀

[@ExcelTutorials1]

This was explained very well. Thank you!

[@DileepKumar-sf1zm]

Many importers and entrepreneurs have already lots of bad experiences in some fulfillment centers. Mishandling of logistics and delays are only some of them. In Fulfillmen, we keep on upscaling warehousing technology to ensure there would be no room for any mistake and to secure that all of the logistics remain protected and unblemished. We offer warehousing solutions that cater all big brands to small e-commerce companies.

[@ClassyJackBF]

"No government is needed" What about when producers evade some of the costs that come with producing certain things? Like environmental costs, they may not directly show up on a balance sheet but they're still there and have the potential to cost societies a lot of money. Citizens then end up involuntarily subsidizing the private profits of producers.

[@robertbennett9569]

Not to mention how some countries subsidize industries to make them more competitive in global trade. This video is like a PR piece; conveniently omitting all factors by which governments and corruption influence trade. The video also ignores all aspects of economic warfare as it they didn't (or couldn't) exist.

[@kamielheeres8687]

@@robertbennett9569 In order to provide subsidies the government will have to increase taxes in order to pay for them. The government is essentially reallocating resources that would have been used more efficently if the free market had allocated them. So subsidizing industries hurts their economy. Meanwhile the importing country now has access to cheaper products. And while their domestic industry might struggle against these chaper products the fast majority of the country is better off. So subsidies are counterproductive and the best response to subsidies Is to just thank the subsidizing country for their cheap products and to keep importing them.

[@robertbennett9569]

@@kamielheeres8687 allot of expertise gets lost permanently when whole industries are shut down by foreign competition. The foreign competitor may keep things cheap just long enough to collapse an industry and then inflate prices. That is how the story plays out in real life I believe.

[@kamielheeres8687]

@@robertbennett9569 The exact same will happen to the subsidized industry when it no longer recieves those subsidies. They will have lost their competitive advantage and will collapse.

[@robertbennett9569]

@@kamielheeres8687 That is absolutely true. Government meddling seems to always produce slack - loads of purposeless jobs and waste. Were it not for the disruptive nature of reality, people would seek to avoid competition and fail at being excellent. True when governments blindly subsidize and true too when governments try to create artificial competition. I'm way too small a mind to think of a solution that fixes everything.

[@informallyformal4466]

The world tried protectionist trade policies once before during the Great Depression, and it failed miserably. In the end, it ends up hurting the consumers. However, countries do have some form of protectionism, from time to time, especially to protect 'Infant Industries' and guard against 'Dumping'. But most of these policies should be time bound, otherwise it ends up hurting the very people whose interests you are trying to protect.

[@coolsimpsons]

I believe you are referring to the Smoot-Hawley Tariff Act of 1930 ( en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act ) which raised overall tariffs by some 20%. I would agree that the Smoot-Hawley Tariff was bad, not because it was a tariff, but because it raised rates to ridiculous heights at a time when the whole world's economy was crumbling. Remember that prior to 1913, when the IRS was created, the vast majority of America's taxes were composed of tariffs. Well, excise taxes and tariffs. If you have ever complained about federal income taxes being unfair, perhaps you should reconsider tariffs and their history in America ( en.wikipedia.org/wiki/Tariff_in_United_States_history ). But if you love the IRS that is none of my business and I apologize.

[@DM-ce6su]

well,but patents,intellectual property,petrodollars combined with fiat currency and pre-existing capital kind of complicates the "i pay with my production" idea.because,well,it entirely ignores a rather important factor,i.e the rate,or how much production. also there is the issue of how do you measure "production".because market is definitely not fair,considering all the above mentioned machinations.

[@androidtv8114]

5:50 ^ This is the ultimate goal

[@boggless2771]

In some cases, ie. USA, almost all manufacturing jobs are leaving to go to developing nations like Thailand. Its only more profitable there because of the trade off for worse work conditions and environmental harm. If it wasn't masked by the currency some people wouldn't buy the product. Also if there are no manufacturing jobs here there would be massive unemployment with only a few being able to find better jobs. Please correct me if im wrong. P.S. First!!!

[@rustyshackelford6834]

They can also vote for someone else that will reinstate tariffs lol

[@MrDanielfff777]

It doesn't create unemployment, did you watch the vid?

[@Eddie_of_the_A_Is_A_Gang]

Manufacturing jobs are leaving the US because of Overregulations and Unions making the jobs unnafordable. the USA actually produces a lot, lot more than Thailand is capable of producing so much more because of the avalaible skills and technology. However, Unions and regulations which drive up the cost of operations are making these advantages insufficient, meaning that the industries will leave elsewhere.

[@calebgeorge6991]

Ah yes, being served bread rolls whilst lying shirtless on a beach somewhere

[@wirthbrothers7807]

NICE EDITING

[@MrDanielfff777]

Great vid

[@commercialartservices9399]

Thanks for the piece corporate ownership class.

[@hellobhaveshbhatt1223]

Fresh fruit vegetable exporter from india Www.flywing.co.in

[@gregorius790]

Thanks.

[@zuutlmna]

Looking for KZbin presentations that discuss pros/cons of importing everything.

[@robertbennett9569]

In its ideal, capitalism is the best system the world has yet conceived for generating freedom and happiness. Hopefully we can evolve to realize its potential.

[@0ct0puz]

There is however an exception to this rule. We shouldn't want to be fully dependent on another country to be fed. Edit after 4 years: there are more strategic goods than food.

[@boggless2771]

Edwin de Goede - yes because then they'd have full control over us. And the people who would want to farm in the original country would be unemployed

[@boggless2771]

F - yes but with a massive population like the US has there are people who are best fitted for one specific job (for every job). Tariffs can keep these jobs feasible and maximize how much work can be done. Not everyone can do the most "innovative" jobs.

[@dennisp8520]

@F humans can't compete with robots. I'm s person that doesn't believe in stopping innovation but I also believe there is a real delima that needs solved to keep people being able to live s good life. I.e universal income

[@aminuabdulmanaf4434]

​@@dennisp8520 that's a false dilemma. People have made this argument since time immemorial, there will always be something for people to do. Today, less than 5% of americans are farmers compared to over 90% in the 1800s. Going by that inexplicable fear, most Americans should be jobless today.

[@MrDanielfff777]

@@boggless2771 There is always unemployment benefits

[@abcd12899]

Hw u made this video...

[@americanguy8431]

Great channel but so less views 😞😞

[@dagamingpack3147]

ok american guy

[@bwash6743]

We have a lot of oil actually, in Alaska

[@delosangelesalleajerahp.3846]

unsa tong orange2 wako kasabot ato

[@kendreamer6376]

The only other thing I will add is that there is no political will for non-regulation because every time a person loses a job they complained to the government

[@SL-pg4dh]

Exactly and democracy and the party system ensures that there are always candidates willing to take up their cause, even if it doesn’t make economic sense, it makes political sense, because you need their vote.

[@marunio435]

People who think that export is a goal of economy, consider that the purpose of life is working. That's the point.

[@jasonscott5932]

Can someone send this to The Donald?

[@wirthbrothers7807]

NICE NO CAP

[@Moribus_Artibus]

5:46 the business in Tribeca went bankrupt due to LES competition. Seems about right

[@jollyroger1009]

True. Free trade is the fast track to utopia for all (on average).

[@MrDanielfff777]

Great vud

[@nadiyahusna185]

8:16

[@raquelpaez5394]

aaaaa ok

[@adel9743]

this vid did not help me at all

[@austinbyrd1703]

Central banks around the world have agreed to finance our reckless spending under fixed exchange rates & propping up the bond market with printed money. We get most of our produce from imports & don't produce much of anything, especially that the world demands. Nor do we have any plan to in the future. In other words, our entire economy is a bubble built on inflationary credit, at the world's expense, & we have no surplus coming anytime soon. The world would abandon us, if their job markets weren't built on fueling our consumption lol. Plus they have a huge amount of public & private dollar denominated debt, & will get sanctioned out of the global economy if they don't comply with the US's wishes. Simply look at what they're threatening to do to el salvador.

[@animalmother8465]

Bullshit, is every1 in the U.S. waiters and waitresses now, what about all of the people who work in industry & manufacturing? If u import everything, the locals won't need 2 buy things made locally. If exporting is a "necessary evil", as if we shouldn't do it, then the things made locally won't need 2 be made. Which creates massive unemployment, like when Clinton destroyed manufacturing in the U.S. w/taxation, causing them 2 leave the U.S. It's stupid 2screw our countrymen 4 socks a few cents less.

[@TheSaltyAdmiral]

+ANIMAL MOTHER The problem is that you only consider half the equation, you can't expect to impose tariffs without retaliation. My point isn't that protectionism is always wrong, my point is that anyone who thinks this is a "slam dunk" and "win/win" for America, truly is too ignorant about this subject to take part in the discussion. What Trump is doing now is incredibly aggressive and risky, and it comes at a tremendous cost to our reputation. That is what makes this so difficult to "calculate", because not everything can be calculated. Even if we somehow magically come out on top from a pure economical standpoint, the will have created a lot of enemies in the process, which is guaranteed to in turn cost us money down the line.

[@natsha4487]

Its politics US has import small things like food and electronics other things and create debt to their country. So how US will gonna pay to debt by giving old technology wepons and aircraft and submarine . In between US has already created latest and greatest wepons and aircraft and submarine. So US has latest technology and power . And it will remain no 1 super power and dollars remain world currency.

[@goldenseagullgotnothingonm6044]

Let me guess; you support Trump's trade war with China? And the US has only been making debt for itself in the form of bonds, before manipulating exchange rates and ridding its debt. And Jews never did push for white genocide. Did you forget that the Germans, namely Hitler, were the ones who killed millions of Jews? And did you forget that America, the only ones who had the power to take those innocent children and save them from death had turned their backs and let them die?

[@bwash6743]

That is true, but traditionally, money was in units of valuable metals or gems that had value in and of themselves. This is why on a dollar bill it is called only a receipt. It is a receipt of something of value. The Us dollar is gold backed, this is why gold and silver are always promoted during economic crisis.

[@stephen2738]

The us dollar is not gold backed at all. It was but not anymore.

[@bwash6743]

@@stephen2738 when did that change or how did it change?

[@stephen2738]

@@bwash6743 1971 The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard.

[@edgarmac]

From Girchi gang where you at?

[@nafeesaabbas419]

didnt help at all!

[@ihl0700677525]

This video is so simplistic and unrealistic. 1. Not everyone is in good term with each other. Every nation have their own interest, usually due to geography and demography, also add historic grievances. If you rely too much on someone, it will become your weakness. Your potential adversary can use it against you. 2. There are always more than one supplier. Let's say your country is good at producing machinery, you won't be the only country doing that. 3. The more you produce something, the better you get at producing it. So there's is strategic value on holding key manufacture sector. If you let other country build their own production by dumping their product on you, you might lose technological advantage in that manufacture sector. 4. In many cases, you need several ingredients or materials to produce something. Let's say you are good at producing high quality car. But to produce car, you need steel, electronics, and plastics. You can produce the electronics, but you need to import steel and plastics. Now your steel supplier want to start making car also, and at first they import electronics from you. So it goes as expected. But then they want to start to make their own electronics, and to do that they reverse engineer your electronics, and ignore your patents. What you gonna do? If you allow that, they will be able to build cheaper car and you will lose your place at this supply chain as no one will buy your car and your electronics.

[@aminuabdulmanaf4434]

Give me a real-world example where this has been a problem.

[@wilfredmcguire917]

www.reddit.com/r/mildlyinteresting/comments/hxzkr0/argentina_thailand_usa_these_pears_took_two_trips/ Here is an example of "efficient" low-restriction trade.

[@ihl0700677525]

@@wilfredmcguire917 "Exploitation" means cheaper cost, and cheaper cost means higher profit margin. Ultimately "efficiency" is measured by cost/money saved, and thus larger profit margin. Therefore, while "exploitation" =/= efficiency, the end result is the one and same: lower cost and higher margin.

[@ihl0700677525]

@@wilfredmcguire917 Your term of "injustice", "unfair treatment", etc are *subjective.* For example, we call sweatshop in certain countries in Asia as "inhumane", but when I talk to people working in those sweatshop, many of them said that it was better than what they have/do before. In my case, most of them are migrant workers who came to the city to find work. Working in a "sweatshop" (i.e. clothing factory) provide much better income compared to subsistence farming in their home village. About efficiency, there are many ways to measure it. But ultimately, cost is the almagamation of *ALL* factors. IMO cost is the ultimate indicator of efficiency. For example, why American corporations outsource/manufacture their electronic components in certain countries in East Asia. While it may seems less efficient in term of energy by mining minerals in California and Australia then ship them to Taiwan or China to manufacture computer chips, then bring the end product back, it may necessary due to other factors. In this case, fabrication of 7nm microprocessors could only be done in few places due to infrastructure and logistic requirement. Building new manufacture facility in Australia doesn't make any sense because in the end the expertise and the market doesn't exist there, but in East Asia. Ofc *the moment it makes sense* to build them in Australia, those corporations *will* build them there. That being said, sometimes cost and efficiency doesn't matter. For example, "National Security" always take precedence over cost and efficiency.

[@ihl0700677525]

@@wilfredmcguire917 You're free to buy exclusively from certain supplier/vendor/company who treat their workers "just" and "fairly". You can boycott those you deemed unfair. However, most customers simply don't care about that, they buy the best value (e.g. best price for the quality) products *regardless* of how they're made and by whom. That's just the *fact.* Either they don't know, or simply don't care. Either way, if you want to change that, you can raise public awareness about those things, and let people decide for themselves. If most customers actually care about "exploitation" and (your term of) "efficiency" more than they care about cost/prices, then the market (and all those suppliers/vendors/companies) will adjust itself accordingly. As simple as that.

[@justinmitzel8077]

This is bordering on propaganda

[@russellwhite1581]

This video misses certain issues: 1. The southern country may have lower national average wages than the Northern one. So importing from the south pushes down the wages of those in the north in order to compete on wage costs. 2. The loss of industry in the North due to importing goods from the South at a cheaper cost has to be paid for. So, the gains to the consumer in "cheap goods" are offset by a rising welfare cost as unemployment has to be paid for using dole money. Increased unemployment means higher crime and that means people having to spend more on security measures. And because you did not mention these downsides to international trade and were too one-sided you get a "Dislike" from me,.

[@coolsimpsons]

This video is *extremely* biased towards Libertarianism and Austrian School of Economics yet pretends it is just a basic Economics 101 video. Please state your biases by saying something like "Libertarians believe..." at the beginning of your videos. I would say the same thing to liberals claiming Universal Basic Income will magically solve everything without disclosing their political beliefs and passing it as objective facts. I also found what I believe is clear logical fallacy in your video: at 2:41 you state: "We want to import more because it means getting all the cool stuff from abroad. Export is a necessary evil that allows us to pay for the goods. If we would be able to continually import, it would be better for us." Glossing over how you seem to be implying stealing is ok, only a few sentences before this you said "I would be most happy just lying belly up, having free bread rolls served to me." There is a heavy tone of "Well of course you can't have things for free you lazy bastard!" sentiment to the free rolls line. You clearly think getting things for free a morally wrong. I'm inclined to agree with that sentiment. Yet trying to import foreign goods for zero cost is admirable? Your moral convictions are completely at odds with one another in my eyes. Regardless of what you think of my example, it is quite disingenuous to not state your heavy biases at the beginning and act as if you are just stating basic objective facts rather than political opinions. And make no mistake, believing there is *never* a time for tariffs regardless of circumstances is definitely a political opinion. On a lighter note, I do like the animation.

[@energiereaktor3976]

What are you talking about? This video explains the economics of free trade. Morals tell you, what you should try to achieve. Economics does no such thing. Rather, it tells you through which means you will get to your desired ends. Therefore this video will tell you nothing about morals. Although many libertarians are in favor of free trade (myself included), libertarianism isn't the justification for free trade.

[@jessepaxton1121]

I would agree if if the loss of domestic manufacturing didn’t result in a bunch of unemployed stupid people pulling welfare.

[@bwash6743]

There are many factors to welfare and it is not because people are unable to learn. There are some unfortunate situations that some people find themselves in.

[@rouskeycarpel1436]

Overwhelming majority of welfare recipients are employed;just not being paid enough by their millionaire and billionaire business owners to be self-sufficient.