Trump’s tariffs’ bad effects on our economy

Given the choice between a national policy that is politically popular to some Americans and one that is economically positive for most Americans, we’ll take the latter policy every time.

But the reverse has been the case for the current and former presidential administrations when it comes to their policies that impose tariffs on foreign goods.

“The sweeping tariffs that former President Donald Trump imposed on China and other American trading partners were simultaneously a political success and an economic failure, a new study suggests,” as The New York Times reported this week.

They did not “bring back jobs,” as the former president had promised they would.

In the end, a nonpartisan group of economists reports, the 2018 tariffs on various raw metals, on washing machines and on a whole variety of goods from China were at best a, well, wash when it comes to American jobs.

And there is simply no question that they raised prices for American consumers, which is after all what they were intended to do.

Because, just as in physics, there is for every action an equal and opposite counter-reaction in economics as well, the tariffs that other countries subsequently imposed on our own products definitely hurt American jobs.

“Farmers who exported soybeans, cotton and sorghum to China were hit by Beijing’s decision to raise tariffs on those products to as much as 25%,” the Times reports.

That the Trump administration tried to offset this by handing out a whopping $23 billion in subsidies to farmers in 2018 and 2019 — well, that’s just the worst kind of big-government intervention in the economy. They were also distributed quite unevenly, the report says, and only partially offset the economic harm that was caused in the Midwest.

But, politically, such tariffs often play well to the crowd, because the economics of international trade are hard for lay people to understand, especially if the United States economy happens to be doing well for a variety of other reasons when they are imposed.

“It is very, very difficult for people to sort of fully isolate why the economy is going well,” David Dorn of the University of Zurich, one of the study’s authors, said. “Is the economy going well because of some particular government policy, or is the economy going well despite the government policy?”

To his partial credit, President Biden has reduced some of the tariffs Trump imposed, especially those levied on European exporters. But he has essentially kept the China tariffs in place, a politically generated move during a time of understandably growing anti-Chinese government sentiment in our country, given the various horrors of the Chinese dictatorship.

Under Trump’s orders, the average U.S. tariff on Chinese goods went from 3.1% to 21%, and the average Chinese tariff on our exports went from 8% to 21.8%, according to the study.

Just as with increases in sales taxes, the consumers hurt most by jumps in tariffs are low-income Americans.

Alarmingly, now-candidate Trump says that if elected to a second term he would double down on the bad policy, saying that he would impose a new 10% “baseline” tariff on all imported goods.

All of this populist monkey business makes one long for the old free-trade economic policy of the former Republican Party, with its fundamentally correct understanding that everyone wins when countries do what they do best in global manufacturing and services without governments’ interference.