The Stunt of Protectionism

by Don Boudreaux on March 14, 2018

in Crony Capitalism, Trade, War

Here’s a letter to the New York Sun:

Betsy McCaughey’s defense of Pres. Trump’s punitive taxes on Americans who buy steel and aluminum serves no purpose but to reveal just how shallow, illogical, and pathetic are the arguments that protectionists shamelessly inflict on the body politic (“Case for Trump Tariffs Centers on the Danger Of a Genuine War,” March 13).

Ms. McCaughey’s central claim is that these taxes are justified in order to maintain U.S. capacity to manufacture steel and aluminum in the event of war.  Forget that the U.S. has been at war now for 16 years with no sign that the Pentagon’s arsenal is weak because of a lack of steel and aluminum.  Forget that Defense secretary Mattis himself rejected the only evidence that Ms. McCaughey cites for her case, namely, the Commerce Department’s report that Trump’s tariffs are useful for purposes of national defense.  (Even the hawkish Wall Street Journal issued withering criticisms of this appallingly flimsy ‘study.’)  And forget that Ms. McCaughey makes no mention of the deleterious effects of these tariffs on the capacity of America’s many metals-using producers.  Ms. McCaughey apparently assumes that raw steel and aluminum miraculously turn themselves into weapons of war.

Instead ask: why does Ms. McCaughey spend about one-third of her column talking about the purported unfair trade practices of other countries and of the supposed positive effects of these tariffs on jobs?  If national defense were the true justification for these tariffs, other countries’ trade practices would be irrelevant.  Ditto for the effect of these tariffs on jobs.  Ask also this: Why does Ms. McCaughey cheer the fact that “Mr. Trump’s tariffs have brought countries to the negotiating table” resulting in Mexico and Canada winning “an exemption”?  As the Nobel laureate economist Vernon Smith astutely noted on Facebook, if these tariffs really are imposed for national-security reasons, “I don’t see justification for exemptions.”

The Wall Street Journal correctly describes the administration’s asserted national-security excuse for these punitive taxes as a “stunt.”  It’s a shame that Ms. McCaughey serves as one of the administration’s stunt-women.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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