Al Stone Series: Tariff talks

The chilly, damp morning of Thursday, Oct. 4 drew the regular 20 into the warmth of the space-heated basement of Diebold to sip on fresh coffee and listen to Dr. Michael Morrison discuss, “The Economic cost and Benefits of Tariffs.” 

Morrison worked off of the most involved audience members to present his facts and theories in an engaging manner — bringing economic theories down to the layman’s knowledge of the American economy. 

At one point, he illustrated the advantage of free market trading by using McDonald’s as an analogy. “Let’s put it this way,” he began, “no two countries with a McDonald’s have ever gone to war with each other.” 

Morrison argued that tariffs, the price a country puts on imported goods, have two sides: a dynamic cost and a static cost. 

The dynamic cost is the cost to the trade relationships a country has built, and the static cost affects the way in which we use the resources we have, now that tariffs have been implemented.

Basically, he stated that the implementation of tariffs affects political relationships and domestic relationships in terms of who can afford what. 

“The real cost of tariffs can be seen in what we call ‘dead-weight loss,’ where you see decreases in imports because of the tariffs, and as a result, there is more domestic production of that product. However, you also see a decrease in the amount of consumption of that product because the number of people who can’t afford to buy that product increases because of the higher price,” Morrison said. 

Furthermore, productivity can decrease when domestic manufacturers — who aren’t as good at producing a certain product, take over the production of that product, he explained. 

It’s almost impossible to return to a one-country manufactured product Morrison said, because of the global nature of manufacturing today. One product, say a TV, is made up of so many different components that are created in various different countries and then assembled at the facility.

Manufacturing, Morrison argued, is a low-tech investment; where America thrives is in the creation of products. Morrison calls the creation of productions “High-tech investments.” The U.S. excels in that type of intellectual development of goods, Morrison said, because our education system is still one of the best in the world.

What the U.S. needs, according to Morrison, is to invest in education and put in place trade relationships that allow us to own the intellectual properties of goods while outsourcing their manufacturing to other countries. 

The Al Stone Lecture Series takes place in the basement of Diebold in the Al Stone Integration Center. Next week’s lecture, on Thursday, Oct. 11, will be given by Dr. Roger Solberg, who will present on his time growing up on Staten Island in his lecture: “New York City’s Forgotten Borough: A Staten Island Boyhood and the Art of Memoir-Writing.” 

Shayma Musa can be reached at voices.spectator@gmail.com.

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