Here’s a letter to a new correspondent.
Mr. S__:
Thanks for your e-mail, in which you write that “regardless of the true motives of the President’s tariffs, his policy is deserving of support because it encourages us to buy more American made steel, aluminum, motor vehicles and other vital goods for national defense rather than rely on cheap imports of these things which reduce production from our own factories.”
I believe it to be enormously unwise to tolerate any president exercising as much unrestrained discretion as Trump exercises in his chaotic setting of tariffs. He not only acts as if he’s a monarch – and a monarch whose moods are especially fickle – Trump’s claims about the state of the American economy and about the effects of tariffs reveal him to be completely uninformed about the economy and trade. Only by the most freakish happenstance would trade ‘policy’ made by such a confused man promote America’s national-defense abilities.
As to your point that U.S. national defense is weakened by Americans having access to inexpensive foreign-made goods that have some military use, you are, with respect, not thinking big enough.
If you’re correct that our national defense is compromised by Americans having access to low-cost substitutes for new outputs of the likes of steel, aluminum, and automobiles produced in U.S. factories, then not only should the government impose steep tariffs on imports of such goods, it should also impose punitive taxes on the recycling of metals, as recycled steel and aluminum reduce the demand for newly produced steel and aluminum.
Further, the government should punitively tax the practice of making furniture and home-construction materials out of wood: Such taxes would result in more furniture, studs, beams, and household doors being made of metal, thus prompting U.S. steel mills and aluminum factories to expand their production even more. And as metals are more useful to the military than is wood, the resulting stimulation of American metal production surely, by your lights, justifies government efforts to discourage the use of wood in manufacturing and construction.
Finally, the government should also punitively tax purchases of used cars as well as punitively tax all activities aimed at maintaining and repairing cars. By making it less attractive for Americans both to buy used cars and to maintain and repair their existing cars, the government would thereby stimulate demand for the production of new cars and, thus, ensure a larger capacity to produce automobiles in the event of war.
Would you support the punitive taxation of Americans who recycle metals, who buy furniture and household-construction materials made of wood, and who buy used cars or who take steps to maintain their existing cars? If not, why do you support the punitive taxation of Americans who buy lower-priced imported steel, aluminum, and automobiles?
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
