Here’s a letter to National Review Online.
Editor:
With his usual excellence, Andrew Stuttaford reports on the damage inflicted by Trump’s tariffs on American manufacturing – the sector that those tariffs are meant to bolster (“Trade Goes Both Ways,” November 3).
But manufacturing is only ten percent of the U.S. economy; more than 80 percent of U.S. GDP is produced in the service sector – the sector with the highest-paying jobs. The service sector is also overwhelmingly one that, although it imports many of its inputs – for example, medical equipment used by American health-care providers – receives little protection from the tariffs. Trump’s tariffs, therefore, are nearly all cost and no benefit for four-fifths of America’s economy.
A full assessment of the tariffs cannot ignore the effects on the service sector, which is destined to contract as the prices of its inputs are artificially driven upward.
Mr. Trump and other protectionists, as they fetishize manufacturing, might applaud this outcome. But how many of these protectionists themselves work in the manufacturing sector? Certainly not Mr. Trump, whose fortune comes from real estate and marketing, and who’s now employed by the government. Also certainly not the many podcasters, pundits, and think-tank mavens who, from coffee shops or their offices, express their abstract yearnings for more manufacturing employment. And how many of these protectionists hanker for their children or grandchildren to work in factories rather than as physicians, lawyers, architects, educators, or IT specialists?
We Americans are fortunate to have such a large and productive service sector in which most of us not only do work but also want to work. I write as the son and grandson of pipefitters: Factory-floor jobs in the U.S. disappeared less because of imports than because Americans want better employment for themselves and their children – and we achieved this goal only insofar as we were economically free. Tariffs will do us no favors by forcing more American workers back into factories.
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
