Douglas Irwin: Why Trump's Tariff Plans Are Dangerous

The trade economist details the most alarming protectionist policies proposed by the incoming Trump administration.

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Douglas Irwin: Why Trump's Tariff Plans Are Dangerous

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"Tariff is the most beautiful word in the dictionary," says Donald Trump, who made many promises throughout the 2024 presidential race to raise the cost of imports from China, Mexico, and Canada—America's three biggest trading partners. But are Trump's tariffs a good idea or a terrible one? And is the era of free trade coming to a close?

That's the topic of today's Reason Interview. Reason's Nick Gillespie talks with Dartmouth economist Douglas Irwin, author of Trade Policy Disaster: Lessons from the 1930s and Free Trade under Fire, now in its fifth edition. They talk about the negative impacts of the tariffs that Trump levied in his first term; why Presidents George W. Bush, Barack Obama, and Joe Biden also trafficked in protectionism; and why free trade is always under attack despite its overall benefits.

0:00—Introduction
1:13—The fight for free trade
3:06—Donald Trump: "Tariff Man"
5:44—How tariffs affect consumers
9:03—Trump's political motivations behind tariffs
12:33—U.S. steel industry
15:15—The effect of protectionism on jobs
18:39—Automation, industry, and agriculture
25:40—China's protectionist policies
26:58—Smoot–Hawley Tariff Act
33:59—Free trade debates of the Ronald Regan, George H.W. Bush, and Bill Clinton eras
38:41—China's impact on markets
40:24—Populist arguments against free trade
44:49—The narrative about the baby formula shortage is wrong.
51:29—"Made in China" vs. "assembled in China"
52:41—The "Buy American" fallacy

 

Today's sponsor:

The Reason Speakeasy. The Reason Speakeasy is a monthly, unscripted conversation in New York City with outspoken defenders of free thinking and heterodoxy that doubles as a taping of The Reason Interview With Nick Gillespie. The next one takes place on January 21 with two of the nation's most notable proponents of immigration liberalization, David Bier and Bryan Caplan, who will join Nick for a timely discussion about the state of U.S. immigration policy in 2025. They will discuss the implications of the incoming Trump administration's immigration proposals and make the libertarian case for why more immigration will make America great again.

• Video Editor: Ian Keyser

Comments

[Spiritus Mundi]

Dangerous!? We are all going to die!!! Should we wear a mask to protect us? Is there a vax?

[InsaneTrollLogic (On The List!)]

Two weeks, as usual.

[Freethinksman]

They're dangerous because they're dumb. Trump talks as if he is the first person ever to imagine the idea. It isn't like trade wars haven't been fought before. They're infrequent because they keep not working. Rather than learn from others' mistakes though, Trump thinks he is the only person smart enough to make them work. And the halfwits supporting him- especially those in congress who have completely adbicated their roles- will give him what he wants until he realizes he fucked up and scrambles to rewrite history. This is all so far beyond dumb. We had a great country. And we gave to a complete fucking idiot whose balls are tickled by the Christian zealots. There is nothing further from actual *Reason* than the idiocy of this administration fucking up what so many men died to protect. Fucking lunacy.

[JesseAz (mean girl ambassador)]

Why are only US tariffs ever considered dangerous to globalists?

If they are so dangerous, then trying to get other countries to limit their tariffs should be a goal, correct?

This entire belief system that foreign governments can do whatever they want with no response is far more dangerous.

[Whorton]

People fail to realize he is setting up a pretext for negotiations. . .There will be few if any tariffs. We are getting slammed by foreign trade. .
It is a negotiation tactic.

[Super Scary]

We're talking about tarriffs again? I thought we moved on to fear mongering about Trump bombing Greenland and Canada.

[LIBtranslator]

The guy who designed the plutonium pit in the Fat Man bomb that steamed Nagasaki was Canadian. All the canooks need do is cross their arms and KGB Presidente-fur-Life Pootin could proceed to rid us of all the leeches in DC in one fell swoop. Saaaay...

[Freethinksman]

Why is it fear mongering right up the point where it is tried and doesn't work? Are that many people genuinely that learnproof?

[sarcasmic]

https://en.wikipedia.org/wiki/Tariff_of_Abominations

https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act

History shmistory. It will be different when Trump does it.

[InsaneTrollLogic (On The List!)]

So you're arguing in favor of the slave-holding South in the case of the first, and misrepresenting the role of the second in the Great Depression.

The first tariff on your list helped the US become a more industrial nation rather than agricultural, and probably helped the US avoid the fate of the Argentina and Brazil in the early 20th century when nations too reliant on agricultural exports fell on hard times.

The second's role in the Great Depression is way overstated as the US did lower tariff later on, unilaterally, but no one else did, to no effect. The problem was the money supply, not the tariff, dip.

[A Thinking Mind]

The problem was the money supply, not the tariff, dip.

Seriously? This is right out of the mouth of John Maynard Keynes.

[sarcasmic]

I gave up on reading his comments a long time ago. He will start off pretending to be being earnest and sincere, but a few comment later will go on the attack, often saying nasty things like accusing me of incest. So fuck him. He's Lucy, and I'm not kicking. I'll keep the sack of dicks on mute.

[InsaneTrollLogic (On The List!)]

Sarc, if it wasn't for your slavish devotion to discussing "ideas" here, I don't know what we'd do without you.

[Fire up the Woodchippers! (5-30 Banana Republic Day)]

You don’t mute anyone. You’re just a lying coward. And definitely too much of a pussy to engage me.

Face it, you do t belong here. You’re just a far left, drunken shitweasel, and everyone hates you here. Go to WaPo, or Salon. You can be with your own kind there.

[LIBtranslator]

Good choice. I looked at the names and ALL of the mooted grectangles above are nationalsocialist ani. What happens to a sockpuppet when even its own outhousemates have banned it? Does Reason let it screech, carpetbite and schaißtpost to take up bandwidth? Is the idea to let them raise a gag reflex in new visitors who might otherwise have become subscribers?

[charliehall]

"The first tariff on your list helped the US become a more industrial nation rather than agricultural"

I guess you flunked US history. The US population was mostly agricultural until the 1910s and the shift to majority non rural took place shortly after the Underwood law of 1913 replaced tariffs with an income tax.

[LIBtranslator]

READ the actual tariff and the changes were in the search-and-confiscate and customs piracy clauses--NOT the rate schedule. Even opium was taxed at the exact same rate as the previous Prohibition-era tariff. The real racket wrecking the economies of Europe and America was in Geneva as the League of Nations added myriad drug prohibitions to Bert Hoover + Harry Anslinger specifications with CHINA clamoring for a world monopoly on dope! How much yew wanna bet?

[MWAocdoc]

Responding only to the title, tariffs are not particularly dangerous no matter how stupid and counterproductive they are. I doubt that you can find a single life or limb lost as a result of tariffs, although I can imagine a scenario where someone doesn't get a life-saving treatment because something was not imported during a trade war. Somewhat less speculative might be not getting something needed because it was too expensive due to tariffs.

[JesseAz (mean girl ambassador)]

Off sourcing manufacturing to foreign countries holds the same risks. China literally stopped exports during covid.

[Longtobefree]

Except for infected people; they let them travel all over the world while quarantining citizens at home. Sort of like biological warfare, except nobody called them out on it.

[charliehall]

"I doubt that you can find a single life or limb lost as a result of tariffs"

Just the millions who died in WW2 after the fascists weaponized the misery the trade wars caused.

[Nobartium]

Only a danger to the post WW2 world order.

People existed and thrived prior to "free trade", and they will do so again after.

[sarcasmic]

Adam Smith was such a dufus. Amirite?

[InsaneTrollLogic (On The List!)]

Did you read The Wealth of Nations, or are you just repeating what you've heard?

[JesseAz (mean girl ambassador)]

He doesn't read books. Someone said something about the book and he treats the editorializing as having read the book.

[sarcasmic]

Oh look. Jesse attacked me and that invalidated Adam Smith. He gets the fallacy fellatio award!

[InsaneTrollLogic (On The List!)]

Nice try at a strawman, but it's an utter failure.

[LIBtranslator]

Smith was a protectionist Mercantilist who favored the Navigation Acts and trade war against the Netherlands. He spelled that out clearly. Granted the guy was more laissez-faire than his peers, but the British monarchy was (is) far from libertarian specifications.

[charliehall]

Smith's magnum opus was ANTI mercantilist!

[Beezard]

Why does it smell like Post-Liberalism in here all of a sudden?

[LIBtranslator]

By which of the antonymous definitions?

[Peter Kreeft taught me LOGIC, BEWARE !!!!!!!]

Maybe true economically, but life is more than Economics. Give me liberty or give me death comes to mind. Because Biden only cared about money and pollitics and not how terrible peoples' lives were becoming...we are reduced to this.

[Beezard]

Kind of how I see it. Tariffs generally are bad. They’re another tax on consumers and a vehicle of corruption between big gov and industrial collectives.

But the shit with China is a security issue, not an economic one. And using tariffs as a stick to achieve other goals is probably unavoidable when attempting to reorder the world. Which we kind of have to attempt for now several reasons. Thanks to that whole globalist, Fabian socialist drift which aims to fuck American freedom, sovereignty, and prosperity outright.

[LIBtranslator]

Buzz here has a surprisingly sensible argument worked out. Add to that the fact that "Made in China" means "Not to Specifications" or "Imitation, like Monopoly Money" or "Mislabeled Fraud"

[Peter Kreeft taught me LOGIC, BEWARE !!!!!!!]

Consider the stranglehold China has on most of the solar supply chain and then consider
"BLM proposes to open 22 million acres in Western states to solar development"
https://www.utilitydive.com/news/blm-solar-development-roadmap-west/704855/

[charliehall]

The more we buy from China the less possible it it that it can ever go to war with us.

[Ama Valde Intellectum]

As if by that you meant that unified China where they don't harvest organs from citizens, impriosn Uyghurs, send Falun Gong to prison. Did you mean that China ? The leadership cares less about the citizenry fo China than we do .

[charliehall]

My life isn't terrible at all.

[MollyGodiva]

It does not matter if they are dangerous or not. Trump campaigned on them, people voted for him based on that, and Trump needs to implement the polices that the voters voted for. What is democracy if the will of the voter gets ignored?

[LIBtranslator]

Shucks, what is a lynch mob? By that very same standard we oughtta have those, complete with vandalism and shooting that brainwashed girl.

[MollyGodiva]

Tariffs are currently legal and under the power of the president. Lynch mobs and vandalism, while we have seen those under the control of the president, are not legal.

[LIBtranslator]

Tariffs were legal long before the Civil War ushered in income taxes (lampooned by Lysander Spooner) and dry laws ordering bartenders not to serve soldiers--on the same page of the Congressional Record. After Comstockism and dry laws ushered in the 1892 surge of masked communism vote share. Consequent addition of an income tax Crashed markets as the Panic of 1893, then wrecked the rest of the economy. Persistence of communist spoiler vote leverage finally got Communist Manifesto Plank 2 enacted as 16A back when there was nothing resembling a libertarian party to counter them.

[Ama Valde Intellectum]

NO, that is false on logic.
That is without standard. Lincoln contrasted the two in his Lyceum speech
"While, on the other hand, good men, men who love tranquility, who desire to abide by the laws, and enjoy their benefits, who would gladly spill their blood in the defense of their country; seeing their property destroyed; their families insulted, and their lives endangered; their persons injured; and seeing nothing in prospect that forebodes a change for the better; become tired of, and disgusted with, a Government that offers them no protection; and are not much averse to a change in which they imagine they have nothing to lose. Thus, then, by the operation of this mobocractic spirit, which all must admit, is now abroad in the land, the strongest bulwark of any Government, and particularly of those constituted like ours, may effectually be broken down and destroyed--I mean the attachment of the People. Whenever this effect shall be produced among us; whenever the vicious portion of population shall be permitted to gather in bands of hundreds and thousands, and burn churches, ravage and rob provision-stores, throw printing presses into rivers, shoot editors, and hang and burn obnoxious persons at pleasure, and with impunity; depend on it, this Government cannot last. By such things, the feelings of the best citizens will become more or less alienated from it"

[LIBtranslator]

WHY is the individual income tax better than import tariffs? To communist manifesto Marxists it's a matter of Revealed Faith that needs no argument. But to people who fail to see Gestapo agents breaking doors, shooting and looting as the Greater Good, the comparison of those alternatives has merit.

[Ama Valde Intellectum]

False again, and on logic again.
Tariffs raise prices across the board and the poor thus pay disproportionately much greater. The price of eggs , groceries, heating does not affect Billionaires as it does a young familly.
Even more illogical , you confuse violence with the cause of violence.
And a final fallacious idiocy you defend the idea that nobody would be violent or aggressive in regard to tariffs. But public choice theory says the more dispersed the people affected the MORE VIOLENT the response. Biden dragging old pro-lifers off to prison draws publicity and rectification but selective tariffs that benefit the rich and powerful does not.

[LIBtranslator]

READ the confiscation of gold Bert Hoover wrote and FDR amended to remove the word "moratorium." In it the liability of "artificial persons" (corporations) is a fine costing 500 of those 1933 gold eagles the mint never released for circulation. But for "natural person" individuals, it added a ten-year stretch in federal prison. (https://www.govinfo.gov/content/pkg/STATUTE-48/pdf/STATUTE-48-Pg1689-2.pdf#page=1) Tariffs mainly impose fines and libels on corporations. The individual income tax causes agents to kick in your door, shoot resisters and haul survivors off to prison. THAT imported communist manifesto tax is what needs to be eliminated, not tariffs. Let corporations pay all the income tax, then watch spending drop--now that the Trump Court says artificial persons can buy and sell elections like they were wheat crops.

[Ama Valde Intellectum]

Your last sentence has 4 examples of bad rhetoric
Trump Court' is your meaning only . it has no referent
artifficial persons is probably your way of saying 'corporation' but all non-personal groups are artificial then, incl Church , family, city, state, country, etc
Again to buy and sell elections must MUST mean there are 2 parties not one involved.
Like 'wheat crops" is silly. That is a commodity and only doable by rule of law and by those impersonal groups you are against.
Why does your being a LIbertarian escape all those points against 'artifical persons". That is what the Libertarian Party is in the eyes of the law !!!!!

[LIBtranslator]

Anyone in Brazil who buys a notebook, iPhone or whatever is charged a 60% tariff PLUS another 17% sales tax. Yet the lights stay on and you can ethanol up a car and drive. Ecuador, entirely a "dollarized" subsidiary of the DEA, has more blackouts than electricity. They can't even drive a car except on days rationed out by "plata o plomo" licence plate numbers, all thanks to Reagan-Bush² prohibition fanaticism that bans their export crops at gunpoint. Peru, Colombia and Bolivia have been in a similar fix since Reagan's 1987 Crash. Giving murderers immunity to block trade entirely is WAY worse than import tariffs. Libertarian platforms have opposed THAT since 1972!

[charliehall]

You want Brazil's economy for the US?

[LIBtranslator]

Definitely not Ecuador's. The USA had a great economy before the Quings boycotted American exports to force TR to help them ban "evil" drugs. There followed the Panic of 1907, more instability as motphine exporters used the Hague to club their competitors. Chinese blockage caused the glut that led to the Balkan wars and segued into WW1. None of this is known to Nick, much less his "eggspert" who cannot name three rates changed by Bert Hoover's 1930 Tariff Act. It did allow american Sumptuary agents to commit piracy on the high seas and increase the rate of growth of prison populations, since Harry Anslinger interpreted all such laws.

[Ama Valde Intellectum]

ON what basis opposed it? Natural Law? then it is not a matter of being LIbertarian but of being an American to oppose that.
Natural Law & Constitutional Democracy by Thomas D Howes, to be published this year

[TJJ2000]

Reason Writers for the last 8-years.
"If importers have to pay ANY Tax it'll be the end of the world!"
"F'You US productive citizens paying 80% Tax. You don't exist."

[charliehall]

No sympathy for the suckers who voted for Trump because they objected to the modest inflation under Biden. We Trump opponents pointed out that tariffs cause inflation BY DESIGN but the MAGA idiots all flunked Economics 101.

[TJJ2000]

If Trumps Tariffs caused inflation ....
then what did Trumps Tax cuts do?

You're not talking about economics. Your talking about political bias. If you wanted to talk about economics and politics you'd talk about the ARPA and CARES Acts (both pitched/passed by [D]).

[Ama Valde Intellectum]

You are representative of the foolish folks who backed Nobel Prize moron Krugman who was universally savaged for saying what you say

NY Times’ Paul Krugman says ‘inflation is over’ — if you exclude food, gas and rent

[Ama Valde Intellectum]

HOUSE WAYS AND MEANS REPORT says
prices have increased 20.3 percent since the beginning of the Biden-Harris Administration

Modest to you because you have money.

[LIBtranslator]

Mencken noted that some folks HAD to lie. No political party has EVER admitted having been wrong. So the Republicans have cops form booze gangs withkickback protection. Then after Hoover wins, they vote Wesley Jones' Jones Law and make beer a felony while China pressures the League of Nations to give China exclusive monopoly on opiates. The market crashes, followed by banking panics as the US strove to cripple German Pharma were what got Farben and Bayer to fund Hitler's candidacy. Tell me, will Republicans admit any of that? So they make a tariff fairy tale.

[Ama Valde Intellectum]

Mostly false

It was the Catholic Church that was the biggest opponent of Prohibitrion. The market crash would have been ameliorated greatly without the Smoot-Hawley tariffs. As to opiates Trump says he is not imposing tariffs but --- horrible thing to a Libertarian of your stripe--- he wants to stop drug deaths.

And intolerable that you excuse Farben's building of the concentration camps !!!
Let readers see what you are really for: Fascism pure and simple