Evidence is unpersuasive
IWASHINGTON f you are not collateral damage in the escalating trade wars, the bulletins from the wars’ multiplying fronts are hilarious reading. You are collateral damage only if you are a manufacturer, farmer or consumer, so relax and enjoy the following reports.
Whirlpool wheedled Washington into imposing tariffs on, and quotas for, imported washing machines. Unfortunately for Whirlpool, American steel and aluminum makers horned in on the protectionist fun, getting tariffs — taxes paid by Americans — imposed on imports of those materials that, The Wall Street
Journal says, account for most of the weight of 200-pound washing machines. And for part of the decline in
Whirlpool’s share price. And for declining demand for appliances.
Citing the threat to America’s “national security” from American consumers (they caused 2017’s imports of $192 billion worth of cars, 44 percent of all cars sold in America), the administration contemplates imposing tariffs on cars. USA Today estimates that the tariffs would add $4,000 to $5,000 to the price of a car (average price: about $32,000). U.S. auto manufacturers oppose the tariffs, which would also cover vehicle components, $147 billion of which were imported last year for cars made in America by Americans and sold mostly to Americans.
General Motors’ supply chain includes 20,000 businesses worldwide. Of the seven “most American” car models, measured by the value of domestically made components, four are Hondas, three models made in Alabama and one made in Ohio. The number of 2018 models whose parts are all American or Canadian: 0.
However, the hundreds of thousands of Americans employed by Japanese automakers have less to fear than other American autoworkers do from the American government’s fears about American consumers’ threat to America’s security. China, retaliating against new U.S. tariffs on Chinese products, has raised to 40 percent the tariffs on imports of American-made autos. These include BMWs (87,600 of the 385,900 made in South Carolina in 2017 were exported to China) and Mercedes (The Wall Street Journal reports that two-thirds of the approximately 300,000 vehicles made in Alabama are exported worldwide).
Last year, soybeans were $12.4 billion of America’s $19.6 billion in agricultural exports to China, which might impose a 25 percent tariff on soybeans. The Journal reports that University of Illinois and Ohio State University researchers estimate that over four years this “would result in an average 87 percent decline in income for a midsize Illinois grain farm.”
The caroms of trade aggressions and retaliations call to mind an experience Gulliver had when his travels took him to the grand academy of Lagado. There he met a man who had worked “eight years upon a project for extracting sunbeams out of cucumbers, which were to be put in phials hermetically sealed, and let out to warm the air in raw inclement summers.” To those who say this is as plausible as trying to produce prosperity with protectionism, today’s trade warriors respond: Have patience. Given sufficient time, protectionism will pay.
But as the comedian Steven Wright says, everywhere is walking distance if you have the time. Speaking of time:
In the 1830s, a Baptist preacher predicted Jesus would return to Earth sometime between March 21, 1843 and March 21, 1844. When the world persisted, its end was re-predicted by the preacher’s followers for October 22, 1844. Between March and October, the number of believers increased substantially. Despite their great disappointment on October 23, many followers held to their beliefs and went on to found the Seventh-day Adventist Church. The lesson from this story, as from the protectionists’ sunbeams-from-cucumbers economics, is familiar: The persuasive power of evidence is overrated.
WASHINGTON POST WRITERS GROUP