Recently, the Trump administration rumbled about a tariff on foreign steel and aluminum. The usual suspects of free traders and never Trumpers shit bricks. Yes, in theory, free trade is good for the economy. But it isn’t free and never has been. Here in iceland, they have a heavy tariff on all imported goods. ALL OF THEM. I went into the only Costco and ulike every Costco in America, this one was nearly empty inside. That’s because everything Costco sells except fresh meat is imported and everything imported is have taxed. Much higher than 20% proposed by Trump on steel. Like near 100-200%. A typical flat TV is 4-5 thousand dollars. On a typical day in the usa, Costco would move them out by the Pallet. Here, not a single customer had one. No one had a computer. No ipods. No cameras. No cell phones. No cases of oil. The effect of heavy taxes is depressed economic activity. Iceland is not unique. They are typical of all out allies and “frenemies” in Europe and Asia. Heavy taxes on our products to discourage anyone from buying them and demands by us for no tariffs on their products.
I suspect that Costco won’t be able to break through this mentality and get Icelanders to buy like Americans. The prices here will keep the locals from “wastefully” setting up a home theater in their basement or a pergola on their back deck.
Trump is teaching the world a lesson in free trade that they have never known before. Free trade isn’t “free” if Americans are buying your stuff but you don’t buy ours. For decades, the world has been accustomed to the USA being the world’s patsy. We would give them billions because we were fighting communism and then because it made professional diplomats feel good about themselves. Those times are coming to an end and the world leach aristocracy is totally unprepared for it. They were assured that no matter who won American elections, it would be business as usual. Trump is a game changer of historic proportions.