While trade policy debates fixate on tariff rates and who pays, companies around the world are rerouting capital and effort to bypass the most unpredictable major economy on earth. Are tariffs here for the long haul or a fleeting fancy? Will exemptions be honored going forward? Business and political leaders around the world have to ponder these questions because a factory that takes years to build and pay for can’t be packed up and moved every time the White House discovers a new grievance.
Coercive diplomacy might produce the occasional headline-grabbing concession. But leverage decreases when partners have alternatives. India’s deal with Europe was a direct response to U.S. tariffs on India whipsawing from 26% to 50% and finally back to 18% in less than a year. Europe’s regulatory machine is slow and bureaucratic, but for long-term decisions, slow and predictable is preferable to fast and erratic. When Canadian Prime Minister Mark Carney refers to China as “more predictable” than the U.S., it’s a sign that something has gone deeply wrong with U.S. trade policy.
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The world isn’t deglobalizing. It’s reglobalizing around partners who commit to rules rather than those who wield tariffs like a club. The long-term cost of these tariffs isn’t measured in revenue collected. It’s measured in partnerships formed without us and the rise of a trading system that no longer needs U.S. participation to function.
Tariffs don’t conjure consumer demand out of thin air. Americans were buying plenty of washing machines, clothing, and steel before the tariffs. What changes is where some things are made. Production shifts from foreign manufacturers with efficiency or cost advantages to more expensive domestic manufacturers. American producers stand to gain, except when they must pay tariffs to import the materials they need (as is often the case).
But everyone who buys the product pays more. The extra $100 a family spends on a washing machine won’t instead be spent at the restaurant next door, the repair shop, or the shoe store. Real wages—what your paycheck actually buys—fall when the prices of most things rise.
Second is the zero-sum argument: Making China worse off automatically makes Americans better off. This is not how economics works outside of campaign rallies.
Trade is not a game in which one side’s loss is the other’s gain. When Americans buy less from China, it’s true, some of our overseas business competitors lose revenue. But what about the American households losing access to cheaper goods? Or the American producers losing access to cheaper materials and ingredients that make them more competitive?
Here’s Hannes Gissurarson on why nationalists should support globalization.
Eric Boehm asks if the Trump administration will refund the tariff revenues that it illegally seized.
The economics of public stores are fraught. By lowering prices below the market rate, stores struggle to fulfill surging demand and shortages become inevitable. That was the case at Kansas City’s Sun Fresh Market, which closed last year after wasting $18 million of taxpayer money.
Sourcing and stocking perishable food products is a complex business with notoriously thin profit margins. Despite claims by progressives that grocery stores price-gouge, profit margins usually fall between 1 to 3 percent. Partly that is due to shoplifting. Finding good real estate will also be costly in a city with scarce availability. (Whole Foods is owned by Amazon, which was founded by Post owner Jeff Bezos.)
Promising free stuff sounded nice on the campaign trail, but someone needs to pay for it. When his predecessor tried to trim spending on libraries, Mamdani called it “cruel.” Now that he’s in charge, his preliminary budget plan calls for nearly $30 million in library cuts. Those and many other cuts are probably necessary to get the bloated city budget on a more sustainable footing.
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The mayor has said before that his grocery idea would be “political experimentation.” But as the Big Apple faces a $5.4 billion budget shortfall and Mamdani threatens a 9.5 percent hike in property taxes, it’s foolish to spend money studying a foregone conclusion.
Robby Soave is correct: “Libertarians should be wary about releasing the Epstein files.”
