Donald Trump

Trump's Tariffs Keep Harming America

Nonsensical protectionist policies won't make the country great again.

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Wisconsin Republican congressman Sean Duffy recently introduced a bill to give President Trump new powers to raise tariffs in response to actions taken by other individual countries on American goods. This effort to expand the president's power should make the White House happy, since Trump is eager to see his trade efforts bear fruit. We'll likely hear about that during his State of the Union address. But this bill will also move our nation back to the days of the infamous Smoot-Hawley Tariff Act of 1930.

It's a fact that some countries impose higher duties on imports from America than the United States imposes on similar products it imports. For example, the European Union imposes a 10 percent tariff on imported American cars, while we charge only a 2.5 percent duty on European car imports. According to congressman Duffy and President Trump, as long such differences in rates persist, we really won't or can't have free trade.

Their solution is legislation that would give the president power to raise tariffs on American imports to levels that foreign governments impose on American exports. Such legislation is believed to kill two birds with one stone.

First, it would allegedly rectify the supposed "unfairness" by equalizing duties. Second, it would force foreign governments to lower their tariffs, making trade freer for everyone's benefit. Talking to Fox News recently, Rep. Duffy declared that his strategy will guaranty a speedy resolution and lower tariffs, since no country can afford to not to trade the United States.

These arguments are the same ones the Trump administration served up a year ago when it started a trade dispute with our closest allies by unilaterally raising steel and aluminum duties. That dispute evolved into a trade war with China. Not to worry; the administration claims that trade wars are easy to win, and that no countries will dare to retaliate (against our metal tariffs) because, as Duffy echoed, they can't afford to cut themselves off from our huge market.

Wrong. Pretty much all countries have retaliated against Trump's tariffs. So far, nobody has caved.

Moreover, while Rep. Duffy claims he is "a free trader," apparently he doesn't understand that the economic case for free trade is fundamentally unilateral. A country gains by lowering its tariffs regardless of what other countries do. Yes, it would be great if all duties around the world were cut to zero. However, the United States would still benefit from lowering its tariffs to zero, independent of other countries' trade policies.

That's because U.S. tariffs are taxes, the burden of which is hung like a millstone around the necks of American consumers. Similarly, foreign tariffs on U.S. exports fall heavily on foreign consumers. As such, it defies logic for an American president to punish American consumers in order to prompt other governments to be kinder to consumers in their jurisdictions by ultimately lowering tariffs.

Finally, according to a detailed paper by my colleague Dan Griswold appropriately called "Mirror, Mirror, on the Wall," it seems like Rep. Duffy and administration officials aren't really sure what a reciprocal system of tariffs should actually look like.

For example, matching higher foreign tariffs line for line would be a very daunting task in our post-war global trading system, which rests on a simple principle: While World Trade Organization countries can set duties as they please, they must apply the same rates on the same item no matter where it comes from. This requirement means that no member can unilaterally raise a duty on given items coming from one country alone. If they do, retaliations and litigations will jeopardize a system that has done so much to free trade over decades.

Rep. Duffy and the president may have to face taxpayers' wrath when they realize that they're the reason why the price of thousands of the goods they consume has gone up and their standard of living has gone down.

Focusing on our 11 largest trading partners, Griswold also shows that a reciprocity plan would require raising more than 25,000 duties on "$583 billion in imports to the United States, raising the duties on 45 percent of imports from the affected trading partners."

Nonsensical protectionist policies like these aren't likely to make American great again. They're more likely to make it look like 1930 again.

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65 responses to “Trump's Tariffs Keep Harming America

  1. Libertarians should be comforted by the fact that, unless Sean Duffy requested and received Nancy Pelosi’s blessing before proposing his dopey bill, Sean Duffy and his proposal are irrelevant to any debate or legislation with respect to tariffs.

  2. Is this another article where we pretend tariffs never existed or global trade was in perfect balance prior to trump?

    1. Straw man. The argument isn’t that tariffs never existed or that global trade was in perfect balance (the last point is a particularly stupid goal), but rather that our country is better off with unilateral free trade, regardless of other countries’ restrictionism. You can debate that if you want, but at least be honest with what you are disagreeing with.

      1. I’d welcome that debate. This article is arguing that matching foreign tariffs is hard so we should just give up on the whole fair trade idea.

        1. Maybe in part, but VdR definitely addresses what I was referring to.

          A country gains by lowering its tariffs regardless of what other countries do. Yes, it would be great if all duties around the world were cut to zero. However, the United States would still benefit from lowering its tariffs to zero, independent of other countries’ trade policies.

          That’s because U.S. tariffs are taxes, the burden of which is hung like a millstone around the necks of American consumers.

        2. “Fair trade” is a lie. Voluntary trade is fair; only outsiders, third parties, could ever claim ‘unfair’ [absent fraud].
          The debate, such as it is [it was decisively lost by the mercantilists in the 18th and 19th centuries] is ongoing at Cafe Hayek.
          Try this:
          Cafe Hayek
          A point on which Krugman and Bastiat agree. Of course, that’s Krugman the economist, not Krugman the hack pundit.

          1. Amen! If two (or more) people voluntarily agree to a trade, it is fair by definition.

            Anyone who disputes that is an authoritarian thug. No one has any moral authority to interfere in my business with anybody else. No one has any moral authority to steal my money to enforce their meddling in my business.

            Fuck off, slavers!

      2. Define better off. We are always better off in an academic sense since tariffs always raise prices and create deadweight loss, but there are consequences permitting other nations to take advantage of us without retaliation, such as the loss of domestic industry, economic diversity, and to a lesser extent sovereignty and security as we surrender key industries to hostile foreign powers.

        1. You’ve done it for me. I recognize that with any choice there are tradeoffs. Choosing unilateral free trade is no different. However, I view the framing of this similarly to how I view the argument that we should eliminate self-checkouts to protect cashiers. If our goal is purposeful inefficiency for the purposes of protecting jobs, we should pay half of our unemployed to dig ditches, and pay the other half to fill those ditches in.

          1. Contrary to popular belief, self checkout machines actually slow checkout times because of mechanical errors, refilling cash reserves, and user error. Self checkout might seem faster on a case by case basis, but when you’re the unlucky SoB who has to wait ~10 minutes while I wait to open the lower safe, make the accounting entry to move cash up, open the self checkout machine, remove and refill the bins, etc. you won’t be happy. In the long run, it’s actually a lot faster and more efficient to remove self checkout, at least for grocery. Self checkouts are mostly placebo because you think you’re in control.

            1. Do you have any sources for that? If you do, does it take into account the number of cashier hours saved? I’m not trying to be a dick, I’m genuinely curious.

              1. There are a few articles from trade magazines that generally discuss the tradeoffs of self checkout machines, but I’m mostly pulling from personal experience as a CSR for nearly 3 years. I had to fix the machines regularly and they caused a ton of problems. People tried to use coupons, they would scan the wrong barcodes, they would decide they didn’t want something, etc. and all these actions required one of us authorizing it. Plus the machines cost a ton to maintain. We couldn’t move people to a backup machine and had to schedule more cashiers either way, so we really ate those costs. Eventually our store removed all of our self checkout machines and scheduled significantly more cashiers to replace them.

                http://theconversation.com/the…..outs-78593

                1. Also, we kept track of IPM (items per minute) speeds and bar getting a terrible cashier that we couldn’t get rid of due to seniority (I worked in a union shop unfortunately), good cashiers can easily hit 25-30 IPM. I’ve never seen a regular shopper go that fast, especially not at a self checkout considering they don’t have the type of design that allows for rapid checking. The machines really are best for getting a few items, but people who hate human interaction will take $100+ orders through there.

                  The fastest possible checkout would be coming to me and bagging for yourself. I did some bagging while checking (we had bag racks between the scanner and the revolving thing), but helping out is really the fastest way to go. People who go to self checkout bag for themselves anyways, so they might as well let me take advantage of the lane design to speed things up for them.

                  1. Here’s an article I found about IKEA removing their self checkouts. I’m not universally opposed to self checkouts and I use them myself since I know what to do, but like many economic questions, the answer really is “it depends.” Sometimes they’re great, but it all comes down to what your customers need. Our grocery store had a lot of old people and a more middle class clientele, so we processed a lot of coupons and sales promotions that became complicated during the self checkout process.

                    https://bit.ly/2FZDmVX

              2. “Do you have any sources for that?”

                This is anecdotal, but a good indicator. The three Costco stores in my area all had self check lanes for about a year, then got rid of them. A manager I asked about it after the removal,said that they were not efficient and that theft spiked during that period.

                Costco is generally pretty labor efficient, and their data apparently matches my own observations. They also still had to have dedicated employees helping customers who had problems anyway.

        2. That so-called “loss of domestic industry” has an unseen side which you ignore — the increase in other domestic industry, made possible by freeing up the very loss of the more inefficient domestic industry which you decry. That is what your tariffs do — they prop up inefficient industry at the expense of more efficient industries.

          Markets work towards efficiency. Every government intervention, by definition, props up inefficiency industry and discourages efficiency.

          1. I don’t ignore it, I just argue that it doesn’t exist. Steel workers aren’t becoming doctors just because there’s a shortage of doctors and no jobs for steel workers. The skill gap is far more difficult to overcome in a developed nation than a developing nation and we need to address the availability of opportunities for advancement because there will always be low skill and inexperienced laborers in the work force.

            Efficiency is a misnomer because it implies that market efficiency is societally optimal. As we debated previously, I argued this was incorrect because not all conditions are reflected in the market. Even if markets were perfectly representative of efficiency, people have the freedom to decide that efficiency isn’t But go ahead and deny the existence of externalities again or call people slavers for democratically choosing to have different priorities in a free society.

            1. You need an economics class. Bad.

      3. Speaking of straw men, how about V de R’s hysterical comparison of Trump’s relatively modest and limited tariffs with the sweeping Smoot-Hawley Act?

        Nothing Trump has proposed has remotely come close to recreating conditions that existed 90 years ago, but Reason still keeps trying to pretend the economy is on the edge of collapse.

        When people routinely exaggerate the effects of Trump’s tarrifs they hurt their own credibility.

        1. These people have lost their minds with Trump around.

          I catch her and Boehm lying their asses off and blatantly spewing propaganda.

          Its just what Reason has become.

          The trade “wars” are a perfect chance to explain both sides of the position; explain the real effects taking place in the USA, china, and the EU; and factually discuss the history of US trade policy.

    2. Nobody ever said that except you, lc, and others who have no coherent response to “Trump’s tariffs are making things worse.”

      On a personal note a family member who exports lobsters from here in Maine has lost 25% of his business thanks to China’s retaliatory tariffs.

      That isn’t saying that everything was rainbows and roses before Trump’s trade war. But it was better than the current stupidity.

      1. Your family member should learn to code

      2. It’s hurting them but benefiting others. The goal is to force China to stop their trade abuses. Which is a coherent response to anyone who isn’t an idiot or a zealot.

        1. I think everyone realizes the goal. Most people who aren’t “idiots or zealots” realize that the possibility of achieving the “goal” is practically nil…..but might as well ruin a bunch of businesses in the attempt. Stupid.

          1. Also, a month ago the goal was to achieve free trade with China….now it’s to stop trade abuses. Hard to kick a field goal when you keep moving the goal post. Also, only idiots think it’s possible to stop China from such things as IP theft by taxing your own citizenry.

            1. This. Over and over again, this.

        2. And how’s that working out? How much longer do we have to wait? Oh wait, you’re an idiot and a zealot, so you don’t know or care.

    3. JesseAz, the agenda here is to destroy America in any way possible.

      Wreck the US economy, swamp the electorate with Socialism, send in hordes of takers to vote Socialism as policy….

      Trump’s fighting to try and get American importers and exporters lower trade restrictions to prosper.

      MAGA!

      1. Trump’s fighting for the immoral authority to steal my money to enforce his meddling in my business.

        Fuck off, slaver. Stay out of my business. Stop stealing my money.

        1. LMAO!!! Where’s the “Free Trade” deal within the U.S.???!!!???!!! If you want to complain about taxes/tariffs as, “meddling in my business” AT LEAST you could be reasonable and complain about U.S. Federal Taxation….

          Why is the U.S. giving importers a TAX-FREE certificate and not it’s own? Even throwing tax-payer subsidies at them (Yep, tax-payer shipping via USPS via UPU). Its just as crooked as cities using tax money to bribe business except NO LOCAL AMERICANS prosper from it short of retailers collecting those taxes off the shelf price..

          1. That was a word salad composed entirely of stupid. Congrats.

      2. Lc, your understanding of economics (which was staggeringly poor to begin with) seems to be getting worse. US tariffs hurt US citizens. This has been explained to you repeatedly. It’s odd how you favor tax cuts when they’re called tax cuts, but favor tax increases when they’re called tariffs.

        1. Dickskin79, please just stop. Your stupidity is boundless. Best you not showcase it for,the world to see.

          LC, amd others have explained why you’re wrong, many times. If you’re too stupid to understand, then ok, not your fault. But don’t take it out on the rest of,us for trying to straighten out a dullard, such as yourself.

          1. How cute. Little Shitty coming to the rescue of his boyfriend. You two are adorbs.

      3. I have two trolls reply with nonsense every day.

        1. Trolling the stupid has become a full time job, thanks to you.

          1. McJizz, it might seem like you’re being trolled full time, but it’s really just your intellectual betters correcting you.

            1. Wait….so now I’m not the Troll? Damn. I was starting to like my new job.

        2. A third troll!

          What a day.

  3. But this bill will also move our nation back to the days of the infamous Smoot-Hawley Tariff Act of 1930.

    The US-China Trade War: A Timeline

    And by “will” you actually mean won’t.

    1. Wrong. … So far, nobody has caved.

      Veronique de Rugy lying like Boehm lies.

      US trading partners said that they would never deal with Trump. They have. Every single one.

      1. Speaking of lying, liar ….

        loveconstitution1789|12.3.18 @ 10:20AM|#

        Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the “worseness” for us?

      2. Poor alphabet troll. Script is very limited.

        1. I at least post a link to your infamy. You can’t even post a link to your own boasts. The other day you posted two links — one irrelevant, the other broken.

          Up your game, slaver.

          1. You’re turning into hihn

            1. “turning”?

              1. He’s a stupid cunt, but he’s not Hihnfaggot.

      3. What a bunch of horseshit. Claiming success for failures.

  4. ‘ Moreover, while Rep. Duffy claims he is “a free trader,” apparently he doesn’t understand that the economic case for free trade is fundamentally unilateral. ‘

    Adam Smith argues otherwise.

    “There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods. To judge whether such retaliations are likely to produce such an effect, does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles, which are always the same, as to the skill of that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs.”

    1. “It will generally be advantageous to lay some burden upon foreign industry for the encouragement of domestic industry, when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the borne market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country, than what would naturally go to it. It would only hinder any part of what would naturally go to it from being turned away by the tax into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it.”

      –Adam Smith

      If we followed Adam Smith, tariffs would be a lot higher.
      “muh free markets”

      1. Way to cherry pick.

      2. LOL that’s not what that says, jackwagon.

    2. The problem, you dumbass, is that the prerequisite – “the repeal of high duties” – hasn’t (and won’t) happen. That means that the benefit isn’t there, but ALL of the negatives Smith notes ARE.

      Also, it says the matter really shouldn’t be in the hands of politicians, who are buffoons by nature. How’s that working out now?

      I mean, what is with you Trumpfucks? Dumber than dirt, all of you.

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  6. Why’s he always signaling “free kick” in these photos?

  7. “There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods. To judge whether such retaliations are likely to produce such an effect, does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles, which are always the same, as to the skill of that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs.”

    — Adam Smith

    “Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home market, as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable.”

    — Adam Smith

  8. “It will generally be advantageous to lay some burden upon foreign industry for the encouragement of domestic industry, when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the borne market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country, than what would naturally go to it. It would only hinder any part of what would naturally go to it from being turned away by the tax into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it.”

    — Adam Smith

    “It will generally be advantageous to lay some burden upon foreign industry, for the encouragement of domestic industry, when some particular sort of industry is necessary for the defence of the country. The defense of Great Britain, for example, depends very much upon the number of its sailors and shipping. Defense is of much more importance than opulence.”

    — Adam Smith

    1. Of course the problem with this is that by protecting, for example, domestic steel producers you hurt all of the domestic steel consumers that are competing with foreign producers, for example, automobile manufactures. This, in turn, creates a need to impose tarrifs on imported automobiles to keep the game fair and it quickly escalates into a trade war. This is why, most countries that are pro-trade, typically impose tarrifs only for national defense purposes. Picking winners from losers is difficult and I will be surprised if Trumps trade was achieve anything other than making many things more expensive for me and my business. I think people are realizing this.

  9. “High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling frequently afford a smaller revenue to government than what might be drawn from more moderate taxes. By removing all prohibitions, and by subjecting all foreign manufactures to such moderate taxes as it was found from experience, afforded upon each article the greatest revenue to the public, our own workmen might still have a considerable advantage in the home market; and many articles, some of which at present afford no revenue to government, and others a very inconsiderable one, might afford a very great one.”

    — Adam Smith

    “The Act of Navigation very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country, in some cases, by absolute prohibitions, and in others, by heavy burdens upon the shipping of foreign countries. The Act of Navigation is, perhaps, the wisest of all the commercial regulations of England.”

    — Adam Smith

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  11. Also, water is wet.

  12. All the harm.
    Gov’t shuts down, and tariffs cripple trade – yet record number of job creations.
    MAGA!

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  14. For a century and a half the USA was the most tariff protection on earth. We prospered. Free trade has produced enough losers to elect a president.

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