Taken together, the empirical literature tells a consistent but nuanced story. Tariffs reliably raise prices and reduce targeted trade flows. Their employment effects are more ambiguous because they depend heavily on the level of analysis: protected industries may gain, but downstream firms, exporters, and consumers often lose. The productivity and output evidence, however, points strongly in one direction. Tariffs shelter some firms from competition and may preserve some jobs in the short run, but they do so at the cost of higher prices, reduced trade, weaker productivity growth, and lower overall economic welfare.
[DBx: Next time – and there will be many next times – you encounter a protectionist asserting that the case for free trade is “an article of faith,” remember this essay by Jack Salmon – an essay that is evidence as powerful as evidence gets that the economic case against tariffs is rooted in science, not faith.]
Jake Scott explains that “good trade deals make good neighbors.”
Colin Grabow makes clear that “the GOP’s protectionist detour has run its course.” A slice:
Riding a wave of voter anger over the Washington status quo — and, it must be said, weak Democratic opposition — Trump was elected in 2016 and 2024 on promises that included confronting China, revitalizing manufacturing, and correcting alleged abuses by U.S. trading partners. This, we were told, was how America would be made great again.
After more than five years in office, and with a trade policy largely left in place by former President Joe Biden (which should give Republicans pause), it’s worth taking stock. The results are not encouraging.
On the China front, no one can credibly argue that heavy and sustained tariffs have prompted the country to change its ways. Even the U.S. government has acknowledged as much. Instead of producing reform in Beijing, the administration has often focused on trade battles with longtime allies rather than building a coordinated response to China.
If the goal is to compete with China, the answer isn’t to wall off the United States but to link arms with its allies. Deeper trade ties in the Indo-Pacific would strengthen supply chains and ensure that global rules are shaped by the U.S. and its partners, not Beijing.
But the administration opted for conflict rather than cooperation, engaging in skirmishes with allies that became the preamble to numerous trade deals widely described as liberating the U.S. from years of abuse. The deals signed in the president’s second term, however, have proved ill-conceived. Concluded under the threat of tariffs, the agreements secured modest foreign tariff reductions while locking in significantly higher U.S. tariffs under the guise of reciprocity.
On net, these deals have made trade more difficult and more costly for Americans. Their result has been a sapping of American economic strength.
David Henderson loses a bet with Charley Hooper.
Michael McShane’s letter in today’s Wall Street Journal is excellent:
Mr. [Mark] Kelly argues that Arizona’s education savings accounts program forces trade-offs in state spending, even though he concedes that ESAs represent only 8% of the state’s education budget. He then criticizes the $50 billion price tag on the federal scholarship tax credit for education. The 2025 federal budget was $7 trillion, making the scholarship program less than 0.75% of federal spending. The idea that these scholarships will result in significant “lost revenue” is ridiculous.
Mr. Kelly laments that when students leave public schools in a choice system, public schools lose money. “Hold harmless” arrangements can blunt the blow of enrollment shifts, but even if such options didn’t exist, what would the senator propose we do? Shouldn’t funding vary with enrollment? Would he propose not increasing funding when enrollment rises? He can’t have it both ways.
Finally, Mr. Kelly links to a story in the Washington Post that associates vouchers with declining enrollments in Arizona. Recent projections from the National Center for Education Statistics predict declining student populations due to birth dearth, not school choice, as we see the largest losses projected in states like California that don’t have choice programs. Even if choice was driving declines in enrollment in public schools, that should be a wake-up call that public schools are only viable with a captive audience.
The fund will be under the control of five people appointed by the attorney general. They can be fired at will by Trump, meaning the money can go only to people the president sympathizes with. Don’t expect James B. Comey — who is fighting an utterly frivolous prosecution by the Trump Justice Department in North Carolina — to win any compensation.
Instead the money will presumably flow to conservative figures investigated or prosecuted during the Biden years. But people who are victims of malicious prosecution can seek recompense through the normal legal process. If that process is too onerous, Congress can change the law. The new model of “compensation” the Trump administration just invented lacks normal legislative and judicial checks.
Conservatives rightly blasted the use of sue-and-settle tactics employed by progressive groups during the Obama administration. Instead of fighting lawsuits brought by environmentalists, for example, the Environmental Protection Agency would enter settlements that gave them what they wanted. The goal was to use the illusion of an adversarial legal process to lock in progressive policy wins without formal rulemaking that couldn’t pass muster or legislation that couldn’t pass either chamber.
Also criticizing Trump’s “anti-weaponization fund” is National Review‘s Dan McLaughlin. A slice:
Is that bad? Absolutely. Trump critics on the left currently say so. But he’s really just taking another page from the left’s playbook.
The classic Trump modus operandi is to look at something crooked that is done smoothly and quietly by the left through sophisticated lawyering on the left — and then imitate it while saying all the quiet parts out loud. This is another instance. Of course, using legislative appropriations and programs to line the pockets of allied groups is an old standby of Democrats, but so is laundering aid to friends and allies through the judicial system — often, with the knowledge that a part of it gets kicked back.
Arnold Kling looks back on the era of “technocratic economics.”
