Both of the major party presidential nominees are on record in favor of tariffs. While the reasons for such trade barriers run the gamut from national security, to protecting American industry, workers, and so on, the hard reality is tariffs cost you money.
And workers jobs. And no – the nations targeted for tariffs don't pay those taxes. People in the U.S. who buy imported goods do.
And while most populist pols have an allergic reaction to reading, the economic research shows just how destructive tariffs have been. As the Tax Foundation notes:
Federal Reserve economists Aaron Flaaen and Justin Pierce estimated the effects of the tariffs on the U.S. manufacturing sector accounting for both the benefits of tariffs to protected companies and the costs of tariffs to companies that faced higher input prices or other distortions. On net, they found a decrease in manufacturing employment due to the tariffs: the positive contribution from protected industries was significantly outweighed by the effects of rising input costs and by retaliatory tariffs.
Economist David Autor and coauthors found the tariffs did not raise U.S. employment in protected sectors while retaliatory tariffs had “clear negative employment impacts.”
A May 2023 report from the United States International Trade Commission (USITC) estimated the effects of steel and aluminum tariffs on a subset of affected industries and found an annual average $2.8 billion production increase enabled by the higher prices from the tariffs was met with an annual average $3.4 billion production decrease in certain downstream industries. This highlights a pattern of gains for protected industries that were more than offset by losses for downstream industries.
There's more at the link, including the obvious conclusion that “both candidates support higher taxes on American consumers and the increased economic distortions that follow.”
Those are the costs – very often hidden from plain view – of tariffs, trade wars, and the populist demagoguery that enables them. The only winners in a trade war are the handful of connected or preferred corporations that get the protection.
Everyone else? You get the bill. Politicians and their enablers who argue otherwise are spinning willfully ignorant fables. Or are more likely looking for an escape from competition…be it in the marketplace, or the market of ideas.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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