Not so hard, really. From the Office of the United States Trade Representative:
[quote]Trade and Investment Flows Have Substantially Increased
• From 1993 to 2006, trade among the NAFTA nations climbed 198 percent, from $297 billion to $883 billion.
• U.S. merchandise exports to our NAFTA partners grew more rapidly – at 157 percent – than our exports to the rest of the world, at 108 percent.
• As of 2006, each day the NAFTA countries conducted nearly $2.4 billion in trilateral trade.
• Canada and Mexico are our first and second largest export markets; last year, U.S. exports to our NAFTA partners alone accounted for 35 percent of total U.S. exports.
• For agriculture, Canada and Mexico alone account for 50 percent of the increase in U.S.
agricultural exports to the world since 1993.
• NAFTA has been good for Mexican agriculture. Trade growth has been remarkably balanced,
with U.S. agricultural exports to Mexico increasing by $7.3 billion and U.S. agricultural imports
from Mexico increasing by $6.7 billion during the last 13 years.
Result: U.S. Economic Growth during the 14 years of NAFTA Has Been Strong
• Jobs. U.S. employment rose from 112.2 million in December 1993 to 137.2 million in December
2006, an increase of 25 million jobs, or 22 percent. The average unemployment rate was 5.1
percent in the period 1994-2006, compared to 7.1 percent during the period 1981-1993.
• Manufacturing. U.S. manufacturing output rose by 63 percent between 1993 and 2006,
exceeding the 37 percent increase achieved between 1980 and 1993.
• Compensation. Growth in real compensation for manufacturing workers improved dramatically. Average real compensation grew at an average annual rate of 1.6 percent from 1993 to 2006, compared to just 0.9 percent annually between 1980 and 1993.
• Investment. Productive investment, central to rising living standards, has increased. Even
excluding housing, U.S. non-residential fixed, or business, investment has risen by 107 percent
since 1993, compared to a 45 percent increase between 1980 and 1993.[/quote]
Isolated cases of the US losing jobs are not relevant. The question is whether there has been a positive net benefit in terms of jobs, output, investment, and living standards, and the facts clearly show there has been in all categories. Canada and Mexico are huge export markets, and the result has been an increase in manufacturing and services jobs, the latter of which are most easily exported to nearby countries. Of course, it is true that we build lots of cars in Canada and Mexico, and there have been plenty of companies go under and folks lose their jobs. But the gains outweigh the losses by an order of magnitude. To say NAFTA was a government attempt to “ENCOURAGE” outsourcing is simply ridiculous.
I repeat, once again, that such a tariff would be a tremendous burden on low-margin foreign exporters, effectively wiping out entire industries dependent on US buyers. Foreign governments would respond with tariffs of their own, and the potential for trade wars would quickly become a reality.
You seem to be under the impression that poor areas of the US do not already offer incentives to companies looking to set up manufacturing plants. We are more than happy, here in the South, to take business away from the unionist chuckleheads of the North. Toyota, Honda, Hyundai, Volkswagen, BMW, among many others have set up shop down here and we’re glad to have them.
It’s not the US government that discourages manufacturing, it’s the fanatic unions and the long-term liabilities they foist on their employers. Maybe you think that’s just my opinion, but it’s not.
You’ve got some good ideas there, some of which are already in practice. But I don’t see what raising taxes on the financial industry would do for us, other than to raise the cost of capital for American companies. Demand for capital is relatively inelastic, so a fair bit of the tax would be passed on to firms.