Here’s a letter to the Wall Street Journal.
Editor:
David Hebert masterfully exposes several of the errors that infect Peter Navarro’s attempt to defend Trump’s tariffs (Letters, December 24). But because the number of these errors is so large, several more letters are necessary to complete the job.
Another of Mr. Navarro’s errors is his boast that the tariffs are eaten by foreigners (thus causing no price hikes in America) and will spark an increase in U.S. manufacturing activity. This boast is illogical. Tariffs can spark more manufacturing in the U.S. only by causing the prices of manufacturing imports to rise which, in turn, then enable U.S. manufacturers to profitably raise the prices they charge for their outputs. If, as Mr. Navarro asserts, foreigners are eating the tariffs, these same tariffs are driving the excessively low prices that he alleges are now being charged by foreign manufacturers even lower and, thus, doing nothing to incite more American manufacturing.
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
