In a letter to House Democrats urging them to support him for re-election, President Joe Biden lashed out at Donald Trump’s recent call for sweeping 10% tariffs on imported products, complaining it would cost Americans Average household costs increase by $2,500 per year.
He is doing something. Tariffs are typically taxes levied on foreign products as a means to prop up domestic manufacturers and are just a fancy term for tax increases. When other countries stop shipping goods to our markets, they limit consumer choices. They drive up inflation. For example, Trump’s steel tariffs protect the U.S. steel industry but raise prices for all products that rely on steel.
They have led to trade wars, with other countries retaliating by imposing tariffs on U.S. products. Tariffs limit competition and thus reduce innovation. Competition is the key to building a better mousetrap, but why innovate and cut costs when the government protects your industry from market forces? Unlike sales tax, etc., consumers never know why a Toyota suddenly costs a thousand dollars more.
The letter understands that Trump’s proposed tariffs would undermine Americans’ purchasing power, but this comes from wall street journal Two days later, Biden’s latest policy was: “The United States will impose a 25% tariff on Mexican imports from China of products containing steel and a 10% tariff on products made from aluminum imported from the country.” How could that be? Did anyone take his letter seriously?
The media is focusing on Biden’s fitness for public office after one of his debate performances focused attention on his age. Journalists love horse racing stories. Will he stay or go? It’s a legitimate topic, as are the stories about Trump rallies and their characteristic free association and demagoguery. But there hasn’t been enough news coverage of the two candidates’ economic policies.
The problem is that their trade policies are largely the same. Of course, they accept high tariffs for different reasons. Democrats want to protect domestic unions. Populist and national conservative Republicans are mostly concerned about the threat from China. Today they all sound more radical than Bernie Sanders.
U.S. Sen. Josh Hawley (R-Mo.), known for shaking his fist at protesters on January 6, said: “We must put American workers first and bring jobs back to American soil, And rejecting radical climate mandates that make China rich and America poor, Hawley’s attack on the free market was not that different from those on the left at a recent national conservative conference.
As I often point out, we see the horseshoe theory of politics, where the right and the left find themselves in roughly the same position (like two ends of a horseshoe) rather than far apart along a line. as a Politico May explained that Trump’s 2018 tariff plan was “widely derided” but now enjoys broad support from both parties.
The article stated, “The completely different responses to similar policy initiatives a few years apart are another reminder of the extent to which the political consensus in the United States has shifted against free trade.” There are many reasons for the current round of inflation, but I haven’t seen a lot of news coverage about a possible link between tariffs and rising prices.
It’s time to review the basics. The Heritage Foundation, now closely associated with Trumpism, said in 2021 that tariffs caused aluminum prices to rise by 50%. It undercuts one of the main progressive/national conservative arguments in favor of them, which is that they are needed to prevent countries from “dumping” low-priced goods on the United States.
“Indeed, the idea of dumping is one of the great unicorns of trade policy: often imagined but rarely seen in reality,” the Heritage researchers concluded. “Even state-backed Chinese companies cannot afford such losses. Every shipment of aluminum transported across oceans will cause financial losses.” Indeed. But tariff advocates need horror stories to sell their high-tax policies as they prioritize rent-seeking corporations and unions over American consumers.
I always like to quote Ronald Reagan, especially now that conservatives have largely abandoned his legacy: “Free trade serves the cause of economic progress and it also serves the cause of world peace. When government becomes overly involved in trade The economic costs will increase, and the political costs will also increase. Of course, Reagan will sometimes violate his own principles.
The year after his 1982 speech, he spearheaded a 45% tariff on imported heavy motorcycles, a blatant attempt to protect Harley-Davidson from Japanese competition. The Japanese have mostly tweaked their model lineup, while Harley has doubled down on niche markets and has been declining. Many observers blame these tariffs for the company’s current woes.
I support free trade because it promotes freedom, reduces government control, promotes innovation, lowers prices, eases international tensions, reduces overseas poverty, reduces immigration pressures, and improves living conditions around the world. Sadly, no matter which of these candidates wins the 2024 election, we will be in for another round of bad dealmaking.
