Free Trade

Biden, Democrats Are Locking in Trump's Tariffs

Rather than undoing Trump's disastrous trade policies, Democrats in the White House and Congress appear to be entrenching the tariffs as a key part of U.S. trade policy.

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The Trump administration was able to reshape America's trade policy in large part because it simply decided to ignore anything that punctured its manufactured reality about how tariffs work.

Economic data show that American businesses and consumers—not China—are overwhelmingly paying the cost of the tariffs? Send Peter Navarro out to do some television hits where he baselessly claims otherwise.

Thousands of American companies are lining up at hearings to explain why the tariffs would hurt their bottom line? Give Wilbur Ross a can of tomato soup and let him explain that those added costs are actually no big deal.

Farmers are getting gutted by the trade war? Send them fat checks, deny that your policies were to blame, and inadvertently create a new, expensive aid program that will be politically difficult to unwind.

Those clowns are no longer running the show, but the Biden administration seems determined to keep the circus going a while longer. Take, for example, Commerce Secretary Gina Raimondo doing her best Navarro impression during an interview earlier this month with MSNBC. Asked about whether the Biden administration would roll back the Trump tariffs on steel, aluminum, and other goods from China, Raimondo argued that "the data shows that those tariffs have been effective."

Have they? Raimondo was careful to avoid saying exactly what the tariffs have been "effective" at accomplishing, but the actual data would suggest the answer is not much—except, of course, raising prices for American businesses and consumers.

On that front, the tariffs are quite effective. According to the American Action Forum, a free market think tank, Trump's tariffs (and retaliatory tariffs imposed by other countries) have increased annual American consumer costs by about $57 billion. The Tax Foundation estimates that Trump's tariffs amount to an $80 billion tax increase on U.S. businesses. And researchers from Columbia University, Princeton University, and the Federal Reserve Bank of New York concluded that the tariff costs "have been passed on entirely to U.S. importers and consumers." More than three years after Trump launched his trade war, these facts are no longer in doubt.

The fundamental problem is the same one that Trump, Navarro, Ross, and others spent the past few years trying to hand-wave away: Tariffs simply create more losers than winners. The U.S. steel industry, for example, employs about 141,000 workers. But there are more than 6 million workers in manufacturing businesses that consume steel. The tariffs are meant to protect the former group by imposing higher costs on the latter, much larger group.

"The tariffs have shifted injury from one industry to a much broader segment of the economy," the Coalition of American Metal Manufacturers and Users, a trade group that represents 30,000 companies with over 1 million workers, wrote to the White House in a letter responding to Raimondo's comments about the tariffs' effectiveness. "If these tariffs are not terminated," the group warned, "the result will be lost business for U.S. manufacturers and lost U.S. jobs."

Unfortunately, Raimondo's comment doesn't appear to have been a mistake or an unscripted, inarticulate moment. Through its first 50 days in office, the Biden administration has given no indication that it is interested in providing relief to American businesses beset by Trump's tariffs. If anything, Democrats in the White House and Congress appear to be entrenching those policies.

During her confirmation hearing last month, U.S. Trade Representative Katherine Tai said she views tariffs as "a legitimate tool" to wield against China. While acknowledging that Trump's trade policies caused "a lot of disruption and consternation," Tai said she hoped to "accomplish similar goals in a more effective process."

In practice, that likely means giving labor unions—which are typically not huge fans of free trade—greater control over U.S. trade policy. Tai previously worked as the congressional Democrats' top negotiator on the United States–Mexico–Canada Agreement (USMCA) and helped shepherd some major union priorities into the deal. The AFL-CIO, which almost never endorses trade agreements, came out for the USMCA after some last-minute changes to artificially hike wages in Mexican automating plants and more strictly enforce labor standards in Mexico.

But it also likely means maintaining this charade about the effectiveness of tariffs, despite all evidence to the contrary. Because Biden's top trade advisers are more polished than Trump's, they'll likely avoid making outlandish and easily disprovable claims like Navarro's ridiculous "China is bearing the entire burden of the tariffs" promise. Instead, Raimondo and Tai are using vague talk about "effective" policy and "legitimate tools." But don't let the softer language fool you: They are just as wrong.

Perhaps the best illustration of how Democrats are seeking to entrench Trump's tariffs as mainstream U.S. trade policy is a proposal drafted by U.S. Sen. Bob Casey (D–Pa.), a longtime family friend and close ally of Biden's.

During a Senate Finance Committee hearing on Wednesday, Casey said he hopes to create a new grant program to steer tariff revenue to communities where manufacturing jobs are disappearing. His proposal, Casey explained, "would direct the revenue derived from anti-dumping and countervailing duties back to communities impacted by trade."

In other words, use the tariff revenue to offset the cost of the tariffs. It's basically the Trump administration's farmer bailout all over again, except with a different set of beneficiaries.

Rather than recycling tariff revenue through Washington, D.C., and then pretending it is helping the very businesses and communities being harmed by the tariffs themselves, the Biden administration should take the shortcut and simply abolish the tariffs. That would provide an immediate economic boost to the manufacturing sector and would prevent politicians from finding new ways to entrench Trump's tariffs in federal policy.

Of course, that would require understanding the difference between policies that are "effective" for the economy and those that are effective for political reasons. So far, the Biden administration seems to be doing no better than the Trump administration at that calculus.

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  1. If only Comrade Stalin knew!

    1. There’s a lot of stupidity in politics today, but anyone who thought Democrats weren’t the party of tariffs is especially stupid.

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  2. Quit your bitchin’ Boehm. Trumps Defeat Matters.

    No price is too high to pay for the restoration of our norms.

    Authoritarianism has been vanquished.

    Our fearless 1st Amendment heroes of the Fourth Estate enjoy new-found respect as grateful citizens say “thank you for your service”.

    1. So, your suggestion for countering authoritarianism is to have tariffs AND Trump?

      1. Yes, actually. Because compared to Biden and your bosses, Trump was Henry David Thoreau.

        1. Of course your comments make no sense. I don’t think Henry David Thoreau was the comparison you want.

    2. 4th Estate or 5th columnists ?

    3. Recall that Adam Smith himself favored tariffs to offset local taxes on production, protect industries needed for national defense, and pressure foreign nations to reduce their own tariffs against US products.

      Reason pretends they are for classical free trade, while railing against the tariff policies of Adam Smith, and tilting their “free” market to tax US labor on every penny, but CCP slave-produced goods not at all.

      Reason is simply for more profits for corporate America, and pushes free trade as an out of context absolute when it suits corporate profits, but is strangely silent on a myriad of abuses of free trade and individual rights when it powers corporate profits, such as government intellectual monopolies, corporate limited liability, and violations of the Lockean Proviso.

      I seemed to have missed Boehm’s article supporting the right of Americans to buy medicine and medical services from whom we damn well please. Why? Because our medical mafia could no longer extract their government enabled rent seeking pound of flesh.

      1. Wealth of Nations, pg. 356
        https://ibiblio.org/ml/libri/s/SmithA_WealthNations_p.pdf

        “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.”

  3. How would this article have changed if tariffs were treated as a tool of foreign policy, and not simply trade policy. This is the essential truth that Boehm seems to miss….every time.

    1. He isnt able to escape into any non ideal system. If he were he would have to admit the costs from theft that China commits yearly.

      1. ^+10000; Still waiting for Boehm to write about all the subsidizing the USA gives China. China exports cheaper than I can send a letter to my neighbor via USPS – how does that compute?

      2. And still are. None of that has changed. Tariffs have pushed us further from negotiation not closer to it.

        Now Biden is tying it to human rights issues. Oh that will work well.

    2. Whether treated as trade policy or foreign policy the result is the same because they are limit in their effect if effective at all.

  4. From a Koch / Reason libertarian perspective, every policy must be evaluated according to one metric — Does it help our benefactor Charles Koch get even richer? That’s why we were so critical of Drumpf; Mr. Koch’s net worth stagnated or even declined during each year of his Presidency.

    Biden, OTOH, is obviously doing something right because Mr. Koch is already up almost $5 billion this year. So maybe his liberation and dismantling of Orange Hitler’s concentration camps has more than offset the slight harm done by tariffs.

    #InDefenseOfBillionaires

  5. How many times did I comment here that the reason Democrats screeched the least about Trump when it came to tariffs is because he essentially had implemented a policy they had been rattling sabres about for decades?

  6. I think Boehm would argue that foreign policy shouldn’t have a trade component. People should be free to trade with whom they want.

    At least that’s what I would argue.

    1. Meant to be a response to Commenter_XY

    2. Bombs only! LOL 🙂

    3. Would he be able to argue that China should be committing industrial theft, Manipulating markets, using slave labor, etc?

      At some point you have to acknowledge reality instead of ideal states.

      Imagine the horror for the airline industry if aircrafts were designed around ideal systems.

        1. Dude! It’s my right to buy goods made with slave labor and a complete lack of environmental laws! The Chinese stealing every piece of IP under the Sun are those companies’ problems, not mine. Maybe you should have learned to code, like me?

          (Don’t you dare think of pirating this video game I’ve been working 100 hour weeks on for the last six months. That would be wrong.)

          1. But seriously, it’s hilarious that this, and going back to an Obama immigration policy, is what’s going to sour these writers on a Biden Administration.

            1. Obama deported more people than anybody. Perhaps you mean going back to a Reagan policy.

  7. Reason writers flushed their credibility down the toilet by worrying about mean tweets and supporting Biden. You guys are shallow and no one will take you seriously on anything.

  8. Here come the waterworks. Biden wasn’t so liberaltarian as you hoped. Sad.

    1. Who in their right mind would have considered Biden a libertarian??? Maybe those libertarians who are for open borders would, but they are as obtuse as Biden and his puppet-masters.

      Recall that Democrats (including Biden and Schumer) were all against open borders when it threatened the jobs of their black voters. But now that many blacks are “walking away” from the Democrat plantation, the Dems are desperate for a new mass of dependent Latino voters. So now they are all for open borders. How ignorant does one need to be not to see through this charade? These Democrat clowns are not libertarians. They are power-mad war-mongers.

      1. Anything republicans or democrats do that advances libertarian goals is purely a coincidence.

      2. It is all about ethnicity isn’t it?

        Let’s not even talk about Jews and Asians.

  9. If someone is literally Hitler, nothing they do or sanction could possibly be good; everything they touch is tainted, no matter what. If Hitler pulled a drowning child from a river, that child would be the anti Christ.

    But if someone else does the same exact [now “good”]thing, that is different.

  10. God do I wish SCOTUS would issue a ruling declaring executive branch taxation is unconstitutional as the document plainly states and any money that can’t be directly paid back from what has been collected must be paid back personally by the executive who issued them.

      1. It’s telling that the retard thinks his retarded plan would bankrupt Trump when this power was delegated to the executive branch by congress under legislation going back over a century.

    1. You are CORRECT – Congress holds the power; Not the executive.
      However; I’m more concerned about the use of that tax being Constitutional than I am about Congress creepers actually exercising their right to control it.

  11. So you don’t get anything you want and you DO get a bunch of stuff you didn’t want.

    Regretting jumping on the Biden train yet?

    1. Implying Reason doesn’t want 99% of the Biden agenda. This is literally the only thing they will ever take him to task over. The censorship, the higher taxes, the new taxes, the green new deal, the unlimited immigration with no health screening at a time when Reason is vocally supporting permanent lockdowns so that American citizens cannot travel or leave their homes, the new foreign wars. That is all a feature, not a bug.

  12. All this bullshit about how horrible a President Trump was – and his successor is continuing Trump’s policies as if they were his own.

    Sidenote: Did you guys hear that Biden’s team is firing pot-smokers and he yelled at one of his senior staff for allowing someone with purple hair to attend a meeting?

  13. “Wrong, but within normal parameters”

    Oh, how right you guys were.

  14. If only there had been some indication, like a campaign website or TV ads or some such that warned us what Biden had in mind if he was declared the winner….

  15. Of course the tariffs have led to short-term pain and expense, and will continue to do so. That’s always what “wars” of any type do. WWII certainly did. But some would argue that it was worth it to prevent Hitler and fascism from conquering the world.

    Claiming that the sort-term pain created by temporary tariffs negates the benefit of preventing unfair practices by China (which uses virtual slave labor and ignores all environmental protections to ensure their costs are much lower) is akin to claiming that fiscal responsibility in government spending (which creates sort-term pain) is not worth the positive effects of eliminating debt and deficits.

    Of course, if one wants to re-distribute America’s wealth to socialist and other authoritarian countries, then, by all means, allow China to abuse its own citizens and pollute their air, water and land so they can out-compete the US, leading to more unemployment of American “blue-collar” workers and further erode the middle class, which will eventuate in vastly more economic hardship.

    Trump’s tariffs were/are the only way to force a dictatorship like China to play by the same rules that civilized societies have adopted, to stop abusing their workers, and to stop their rampant destruction of the environment. It is meant to be a short-term tactic to bring back manufacturing jobs to the US (which it did).

    Obviously, that increases the price of goods (and frequently increases the quality as well). But are we not willing to pay extra for the long-term benefits? We should be.

    1. Ironically; just cancelling the China subsidies the USA gives them would be enough.

    2. “Of course the tariffs have led to short-term pain and expense, and will continue to do so. That’s always what “wars” of any type do. WWII certainly did. But some would argue that it was worth it to prevent Hitler and fascism from conquering the world.”

      Which is exactly what the Nazis thought. It may cost us now but we will gain an empire.

      The US and allies had no choice in the matter. The only way to “win” was to keep escalating until the enemy was destroyed and could no longer fight. Then we could go back to where we were before. If anyone thinks tariffs are going to defeat China they are delusional.

      Markets adjust and stabilize. If I can no longer export somewhere I will find other customers. If it costs me more to import I will find other suppliers. If I have to pay more for a washing machine I will pay more.

  16. Tariffs have not changed Chinese behavior nor benefited US suppliers and consumers one bit. It is purely a lose-lose situation. The only winners are politicians who can hand out exemptions to their buddies.

    1. “their buddies” — Oh, you mean any manufacturer in the USA?
      I didn’t know the point of the USA was to hand out favors to China.

      1. Sure whomever can deliver the most votes or campaign contributions.

      2. You don’t really think this is not a corrupt crony system do you? You got 1000 companies requesting exemptions. Which ones get it.

        “Why don’t we talk about this over dinner congressman?”

        1. You do realize that USA production doesn’t pay tariffs right?

          1. They pay higher prices for things they need to make their finished product.

            A simple example is my deck project I want. The contractor has to pay more for lumber and pass it off to me. Thus i am stuck with the decision to just pay the extra cost or put off the project.

            Same could be in manufacturing. If my company needs a certain type of steel to make metal beer kegs and has been getting it from a country we put a tariff on. USS or Nucor may not be interested in making it to those specifications
            Now I am going to pay more. If I charge more I may lose business.

            Then more directly retaliatory tariffs. Look what happened to the soybean farmers we had to bail out.

            Our whiskey makers are complaining. We make some of the best whiskey in the world in high demand as an export. They are losing business because of retaliatory tariffs.

            Nobody wins here.

            1. And the blatantly obvious REAL question should be why would it be cheaper to send a ship all the way to China to get lumber than it would be to get it next door?????? That commie-mistake isn’t going to fix itself by wasting even MORE energy going to china.

              How about the fact that U.S. taxpayers have been funding the energy for those ships? There’s favoritism going on alright and it’s costing us here to pay-out favors to China.

              And if you’re still hesitant to see the bigger picture then consider the fact the ‘federal’ government is setup but to regulate international affairs such as defense. Who should pay for international peace? Those who never deal internationally or those who are always dealing internationally. Seems to me; the ‘FAIR’ approach would be to put the tax where the regulation need is. That would be funding the federal “international” government body by those who deal internationally.

  17. Actually the war analogy is informative. The US had a trade embargo on Japan. From their point of view this was an unfair trade practice. Pearl Harbor was a calculated move. They thought it would force Roosevelt to negotiate and lift the trade restrictions. Didn’t work out for them. It also forced us into war with Germany when they declared war on us, another miscalculation.

    Now consider the current situation with China. An economic Pearl Harbor attack which was supposed to force them to negotiate better terms has only hardened their position and resolve.

  18. Meanwhile we are planning a deck project. The price of lumber has gone through the roof mostly because of low supply to meet demand. At the same time there is this big country to the north which is covered in trees but some idiot put a tariff on Canadian lumber.

  19. This a real problem and it shows what happen when tariffs get started. Part of the problem is that relaxing the tariffs will be seen as weak on China. Now China is a real problem, but not the way are politicians portray it. Too many want to see China in term of the old Soviet Union as a military threat. China is an economic competitor and they are looking for the top spot on the economic food chain. Trying to hold them back with tariffs is reactionary and likely unproductive. We need to be out ahead of China and that will likely be difficult. It appears that over the last four years while we were turned inward the Chinese government was looking out ward and to the future. They are developing new markets and building influence. The recent meeting between our countries in Alaska showed that they we us as declining power. It is going to take new thinking on our part and that may be difficult in a country so politically divided.

    1. I’m sure a tyrannical minimum wage hike will fix it..
      I’m sure another ‘save the trees’ tyrannical mandate will fix it.
      I’m sure another ‘eliminate fuel energy’ tyrannical mandate will fix it.
      I’m sure another ‘DNC Labor Union’ tyrannical mandate will fix it.
      I’m sure another ‘Health Insurance’ tyrannical mandate will fix it.
      I’m sure another ‘Tax the productive’ tyrannical mandate will fix it.
      I’m sure another ‘Poor people get to steal’ tyrannical mandate will fix it.
      I’m sure another ‘Lockout Production’ tyrannical mandate will fix it.
      I’m sure another …………… etc, etc, etc, etc, etc, etc….

      USA production has been LOCKED-UP by lefty National Socialism (def; Nazism) and any production allowed to happen is being dictated (red-taped) and stolen by ‘gov-guns’ by emotional crooks.

      Listening to lefties complain about ‘Big Corp’ and ‘equality’ is like listening to that leaching couch potato pot-head playing video games all day complain about how unfair it is that; that other person who is busy all day cleaning, cooking, paying the bills and *EARNING* something is just too entitled, spoiled and wrong and needs to “pay their fair share” (MORE).

      The real ‘core’ of every lefty – The Power to Steal = Wealth.
      But the Power to Steal = ZERO Add-Value.
      The left is WHY the USA is failing.

      1. The US is failing because the far left and the far right are so engaged in an ideological war that they would rather have nothing than to give an inch to the other side.

        1. Far right politics doesn’t encourage people not to go to work.
          Far left politics consistently encourages people to STEAL and not go to work.

          The government was NEVER suppose to have the power to shut-down the economy – that idea is the result of years of mostly lefty politics. But the RINO’s of the right does have their disgusting stain on the subject; I’ll give you that. I throw them in with the Democrats because they vote/think just like 99% of the Democrats.

  20. LOL!

    The Democrats are not only going to put 1.4 million people out of work, they’re going to make it even more expensive them to survive, and that’s 1.4 million votes for the Republican nominee.

    Assuming the Democrats don’t “postpone” the election.

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