Here’s a letter to a new reader of my blog. (He’s not related to me.)
Mr. Jack Boudreaux
You think it “unjust if foreign countries put higher tariffs on US exports than the ones we put on theirs.” And so you conclude that “it is only right if we match their tariffs with equally high ones of our own.” I disagree. While your viewpoint is widely held, it’s based on a premise – namely, that producers have a property right in consumers’ patronage – that is wholly invalid.
Suppose that a majority of Texans so dislike Californians that they voluntarily refuse to buy anything made in California. Many business owners and workers in California are thereby negatively affected. But are these California-hatin’ Texans acting unjustly? Do their voluntary spending decisions violate any rights of producers in California? Should legislators in Sacramento ‘retaliate’ by putting tariffs on goods and services imported into California from Texas?
If – as I hope and expect – your answer to each of these questions is ‘no,’ how can it be acceptable for legislators in Sacramento to ‘retaliate’ with tariffs on imports from Texas if, instead of acting purely voluntarily, the California-hatin’ majority of Texans convince legislators in Austin to impose state-wide tariffs in Texas on imports from California? In what relevant way does this latter method of reducing Texan demand for California exports differ from the former method?
I believe that this latter method (the imposition in Texas of tariffs on imports from California) does indeed differ in a relevant way from the former method, but not in a way that is relevant in California.
The unjustness of tariffs imposed in Texas falls exclusively on Texans; it doesn’t fall on non-Texans. The reason is that no one has any property right in selling their wares to Texans. Texas’s tariffs violate the rights only of Texans who wish to buy goods from California. These tariffs violate no rights of Californians, not even of those Californians who wish to sell goods to Texans. Therefore, for legislators in Sacramento to ‘retaliate’ against Texas’s tariffs by imposing tariffs on imports from Texas would be for these legislators to violate the rights of Californians while doing nothing to right any wrong visited on Californians, for, again, Texas’s tariffs visit no wrong on Californians.
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