Here’s a letter to F&D Magazine, a publication of the IMF.
Editor:
U.S. Trade Representative Jamieson Greer wrote more than 2,100 words about trade yet managed to get correct approximately nothing (“Economics for the Real Economy,” June 2026). Just listing his errors would take nearly as many words, so I here address only one of his mistakes, namely, his claim that in the decades before Trump entered the White House tariffs were “left untried” – that the U.S. pre-Trump embarked upon an experiment with free trade based, not on experience, but only on the abstract, unrealistic models of dogmatic economists.
While it’s true that over the 70 years following the end of WWII tariff rates generally fell and trade became more free, it’s untrue that tariffs and protectionism were “left untried.” For example –
– In the 1970s, Nixon not only imposed, for several months, across-the-board import surcharges of 10%, he negotiated the Multi-Fiber Arrangement, which formalized restrictions dating back to the 1930s on imports of textiles. These import restrictions remained in effect until 2005.
– To avoid even harsher protectionist policies from Congress, the Reagan administration persuaded the Japanese to agree to “voluntary export restrictions” on automobiles. Reagan also tariffed motorcycles, semiconductors, and softwood lumber – the latter of which lasted well into the 21st century.
– Obama slapped tariffs on tires.
– Imports of steel have been restricted for decades.
More importantly, tariffs have been profusely imposed throughout history – including in the United States – and across countries. And although you’d never know it from Mr. Greer’s essay, these actual, real-world tariffs and other trade restrictions are among the most empirically studied phenomena in economics. The consensus conclusion is strong: protective tariffs and trade restrictions make countries that impose them less prosperous than they would otherwise be. Protectionism slows economic growth and suppresses real wages. Removal of trade restrictions promotes economic growth.
Contrary to the impression conveyed by Mr. Greer, we economists oppose tariffs not because we sit surrounded by ivy-covered walls pondering only a priori thoughts and taking pleasure in spinning bizarre tales of imaginary worlds. We economists oppose tariffs because, first, we understand that the scarcity of resources means that no industry in a country can expand without some other industry or industries in that country contracting; second, we also understand – and we have evidence to back this understanding – that government officials have neither the knowledge nor the incentives to allocate resources as well as resources are allocated by market forces; and third, we’ve empirically investigated the effects of protectionism and overwhelmingly find that it enriches special-interest groups at the greater expense of the public.
It’s unfortunate yet forgivable that my dentist and Uber drivers are likely ignorant of this reality, but it’s alarming and unforgiveable that this same ignorance is not only apparently shared, but also peddled, by the U.S. Trade Representative.
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
