Here’s a letter sent last week to – but not published in – the New York Times.
Editor:
In “Trump Credits ‘Mister Tariff’ for the Country’s Strength. Economists Beg to Differ” (January 14), long-time protectionist Jeff Ferry is quoted as saying that “the aim of the tariffs is to rebuild U.S. production.” The implication is that American industrial production declined as trade became freer. This implication, however, is mistaken.
Helped by U.S.-led post-war efforts to open global markets, American industrial production rose steadily, during non-recessionary times, from the end of WWII until the first Trump administration. This production hit its all-time high in September 2018, just as the first of Trump’s tariffs were kicking in – tariffs largely maintained by Biden. Industrial production was then 18% higher than it was in December 2001, the month China joined the World Trade Organization, 60% higher than it was in 1993, the year before NAFTA took effect, 154% higher than in 1975, the year when America last ran an annual trade surplus, and 650% higher than in 1947, the year before the first round of tariff cuts under the General Agreement on Tariffs and Trade.
But since mid-2018, U.S. industrial production has largely flatlined, being today 2.2% below that all-time high.
Informed individuals who wish to spur U.S. industrial production reject protectionism.
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
