Here’s a letter to the Nevada Globe.
Editor:
Spurred by the White House’s recent announcement about tariffs on steel, aluminum, and copper, you applaud Pres. Trump’s protectionism because allegedly it is “rebuilding American industry” and strengthening U.S. national security (“Trump Tightens Tariffs on Steel, Aluminum, and Copper as America First Manufacturing Push Accelerates,” June 2). I have some questions.
– Are you aware that in April 2025, the month Mr. Trump imposed his “Liberation Day” tariffs, U.S. industrial capacity was at an all-time high, being then 11% larger than when China joined the World Trade Organization and 64% larger than when NAFTA took effect?
– Because nearly all imported steel, aluminum, and copper are inputs used in American factories to produce outputs – including military materiel – how, exactly, does restricting these factories’ access to inputs help to ‘rebuild’ American industry?
– The U.S.’s largest foreign supplier of steel and of aluminum is Canada, and Canada is also the U.S.’s second-largest supplier, after Chile, of copper.* How does tariffing imports of these metals from one of our closest allies promote U.S. national security? And as high U.S. tariffs prompt Canada (and Chile, Mexico, and Brazil – other major, friendly suppliers of metals to the U.S.) to build buyer networks away from the U.S., won’t we Americans regret having alienated allies as well as obstructed our access to their metals?
Unlike Mr. Trump’s second term, when tariffs were raised almost immediately, in Mr. Trump’s first term there were no tariff increases, or even announcements of such, until late January 2018, just over a year after Mr. Trump was first sworn into office. Might the following facts prompt you to reassess your position? Industrial production during the first year of Mr. Trump’s second term rose by 1.4%, but during the first, no-tariff-hikes year of Mr. Trump’s first term, this output rose at nearly twice that rate, by 2.7%. Real private-sector nonresidential fixed investment rose, in the first, tariff-filled year of Trump 2.0 by 5.8%, after having risen in the first, no-tariff-hikes year of Trump 1.o by 7.5%.
Other economic measures that performed better during the first year of Trump 1.0 than during the first year of Trump 2.0 include, but are not limited to, all three major U.S. stock indices, real per-capita GDP, real median household income, real hourly earnings of all private-sector employees, and – important chiefly because the administration puts huge stock in this measure – manufacturing employment.**
If you were to investigate the facts rather than swallow and regurgitate conventional wisdom, you’d be much less gullible than you are about the alleged ‘need’ for – and wonders worked by – Mr. Trump’s punitive and mad taxation of Americans’ purchases of imports.
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* According to Claude (whose answers here are consistent with what I’ve learned over the past few years).
** See my forthcoming column at AIER.
