The Anti-Growth Tariffs Are a Clear and Present Danger to Our Future Economic Prosperity
Without a hint of irony, while announcing the 25 percent tariffs on imported steel and the 10 percent tariffs on imported aluminum on May 31st, Commerce Secretary Ross proclaimed that “we take the view that without a strong economy, you cannot have strong national security”.
In reality, these tariffs will weaken the U.S. economy and risks a recession.
If these tariffs are implemented, the Trump Administration will be imposing a large tax increase on the U.S. economy. The cost from this tax increase will be borne by U.S. consumers. Goods from automobiles to canned tuna fish will all increase because of these actions.
Perhaps even more troubling, the tariffs are another body blow to the global trading system that has fueled U.S. prosperity for more than 70 years. And, while these trade opportunities are often couched in terms of exports, this is only part of the story.
Imports have improved the quality and quantity of goods and services we Americans consume on a regular basis – often providing these goods and services at more affordable prices. Foreign investment into the U.S. economy, another part of the global trading system, has created jobs, increased our productivity, and made the U.S. wealthier. All of these benefits are jeopardized by the tariffs the Trump Administration is now imposing on our closest trading partners.
Undoubtedly, the global trading system is rife with many trade impediments that must be managed, such as China’s theft of intellectual property that is also a clear and present danger to the global trading system. But, creating more trade impediments is not the answer.
Further, the constant anti-trade rhetoric espoused by the Administration threatens irreparable harm by validating damaging policies that will weaken the U.S. economy and, by the logic of Secretary Ross, will consequently weaken U.S. national security as well.
Instead of disparaging the global trading system and threatening it with tariffs and other barriers to trade, the Trump Administration should be working toward creating even greater trading opportunities for all Americans.
Wayne Winegarden is senior fellow in business and economics at the Pacific Research Institute.