Here’s a letter to the Wall Street Journal:
Editor:
By my count, Peter Navarro’s op-ed in today’s pages – “Give Trump’s Tariffs a Fair Test” – is the seventh such piece that you’ve published by him since he became Donald Trump’s trade shaman. Each of these essays is a cascade of contradictions and confusions so immense that even listing them would require an unusually long op-ed. But two examples will suffice.
First, in a March 6th, 2017, piece Mr. Navarro argued that U.S. trade deficits inflict such harm on the American economy that U.S. trade restrictions are justified as a means of trying to reduce these deficits. Yet in today’s op-ed he boasts that the “threat of auto tariffs has likewise drawn billions of dollars of new foreign direct investment from the likes of Toyota, Volkswagen and Mercedes-Benz.” Mr. Navarro apparently doesn’t understand the elementary fact that, because every dollar invested in the U.S. by foreigners is a dollar not spent on U.S. exports, the investments about which Mr. Navarro today boasts promote the very trade deficits that, in other contexts, he bemoans.
Second, Mr. Navarro commits the sophomoric error of confusing correlation with causation. Yes, today’s U.S. economy is booming. But economics tells us that, contrary to Mr. Navarro’s claim, this good performance is fueled, not by tariffs, but by the tax cuts and deregulation for which the Trump administration can take credit.
Researchers who’ve focused in on the actual effects of the tariffs find that, without them, today’s economy would be even more buoyant and healthy. To cite just one example: Federal Reserve economists Aaron Flaaen and Justin Pierce find “that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices. For manufacturing employment, a small boost from the import protection effect of tariffs is more than offset by larger drags from the effects of rising input costs and retaliatory tariffs.”
I understand the importance of giving some of your valuable ink to prominent officials. But you insult your readers by repeatedly publishing arguments that are so comically self-contradictory and intellectually insupportable that the author, were he to submit them as answers to a high-school economics quiz, would receive an F-.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
