Tariffs v No Tariffs: My Small Business
I used to think that I was for free trade. Actually, I probably continue to be. However, the current international trade is not "free trade.”
The price of products made in the US includes many government mandated expenses, some of which have no direct relationship with the product or its production.
Before starting to produce a product, a facility is necessary. And, in the US, it can’t be located just anywhere. The federal and State governments own or control an enormous amount of property in the US. Therefore, if I want to raise and sell livestock, I’m banned from buying or renting lots of land (even though most of the federally owned/managed land in unconstitutional.) So, I have to find available private property. Now I am limited by zoning laws.
Once I’ve secured the property for my facility, I’ve already effected the price o my product because my choices were limited and I’ll most probably have to pay property taxes, in addition to taxes imposed when I bought the property.
As I build my facility, regulations and taxes add more to the eventual cost of my product. Then as I finally start production, my raw materials have all the same built-in costs I’ve encountered. And my production is regulated—for good or bad—by the government, and the minimum wages and FICA of workers is set by the government.
Products made in a country where the government owns the property, production, and supply line don’t have these costs.
For me, this is not a theoretical analyses. My family made and sold candles from 1965-1988. In the early 1970s, we were selling a quarter-million dollars of candles per hear. We were forced to close our company in 1988 because China was selling candles in the US for a cost that was lower than we paid for raw wax. Half a ton of finished Chinese candles cost less than a half a ton of wax that we bought directly from American petroleum companies.
I lost my career, my employees lost their jobs, and the world lost the most creative candle company that ever existed. (Our innovative molding techniques are now used by people around the world.)
We don’t want to ban sales of foreign products because that would lead to an uncontrollable and destructive black market. Therefore, we need to decrease regulations, where appropriate, open up property to private businesses, and decrease taxes, which can be replaced by tariffs.
