Here’s a letter to a student who, admirably, wants “to give our president the benefit of the doubt.”
Ms. L__:
Thanks for your e-mail.
You’re correct that “even Adam Smith saw tariffs possibly helping people here by pressuring other countries into cutting tariffs.” You then wonder if “those opposing the president on tariffs are being unjust in not understanding his larger goal may be to make trade more free over time.”
With respect, I don’t believe that I and other serious opponents of Trump’s trade ‘policy’ are being unjust. Please realize that, as Phil Magness observes, there are at least five different rationales that Trump and his lieutenants offer for their tariff hikes, with each of these being inconsistent with the others.
Consider the rationale that you mention – namely, use tariffs to open foreign markets. If that view is represented at all within the administration, it’s probably by Treasury secretary Scott Bessent. Yet this rationale is wholly inconsistent with one of the most commonly expressed justification for tariffs, one that I’m sure is uttered regularly in the White House – namely, to protect American workers from having to compete with low-wage foreign workers.
If, as you generously speculate, Trump’s goal is to use tariff threats to make global trade freer, then success on this front will result in exports from low-wage countries increasing. The reason is that when a country’s imports change, its exports change in the same direction. Therefore, if Trump convinces all countries to lower tariffs, foreign countries – including low-wage ones – will export more, and Americans will import more of these exports.
Now I’m confident that any such increase in American imports from these countries would be a boon to American workers and families. But because Trump & Co. believe the opposite, they either do not really intend to use tariff threats as a means of lowering global tariffs or they haven’t thought seriously about the implications of their trade ‘policy.’ I’ll bet it’s both.
Good luck on your exams!
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
