- Cafe Hayek - https://cafehayek.com -

Some Links

Tweet [1]

In a new paper, my Mercatus Center colleague Dan Griswold eloquently exposes the dangers of GOP proposals to give Trump more power to negotiate “reciprocal” tariff rates [2]. Here’s the abstract of Dan’s excellent and important paper:

Proposals to match higher foreign tariffs with higher, “reciprocal” US tariffs would be an economic and administrative nightmare. This policy would violate the long-standing US commitment to apply tariffs on a nondiscriminatory “unconditional most-favored nation” (MFN) basis, a core principle of the international trading system. Applying reciprocal rates would exponentially complicate the US tariff code, lead to higher duties on a range of imports important to US consumers and producers, and invite retaliation from major trading partners. Specifically, if applied to the United States’ top 10 MFN trading partners, reciprocal tariffs would result in a nearly 10-fold increase in the number of duty lines in the US tariff code. The average US duty on imports from those nations would more than double, from 2.1 to 5.4 percent. Imposing reciprocal duties would ultimately threaten to unravel a postwar global trading system that has reduced tariffs worldwide while protecting US exporters from discrimination.

And here’s Cato’s Simon Lester on the calamitous “reciprocal”-tariff proposal [3].

Pier [4]re Lemieux reminds us that exports are costs and imports are benefits [4]. (If you dispute this truth – that is, if you, like so very many protectionists, including Trump, believe that exports are benefits that must unfortunately be paid for by importing some goods and services – please contact me. I will be happy to offer you the opportunity to export to my household as many goods and services as you wish, and to impose on you no obligation to receive from me anything in return.)

Eric Boehm reports on yet another cost that Trump’s tariffs inflict on Americans [5].

My intrepid Mercatus Center colleague Veronique de Rugy reports that the U.S. military does not run a tight fiscal ship [6].

Phil Magness debunks the myth that soaking the rich paves the path toward greater income equality [7]. A slice:

The top marginal rate in itself does not and cannot consistently support the causal link that Saez, Zucman, and Ocasio-Cortez attribute to it, because it does not even measure the mechanism behind their theory — that is, that high tax rates discourage high income earning and thereby reduce inequality. Effective tax rates, as we have seen, do not fit with this historical narrative.

John Miltimore documents some of the damage that recent increases in minimum wages have inflicted on workers [8].

GMU Econ alum Dan Mitchell busts the myth that communist Cuba’s health-care system is splendid [9].

Comments