Georgetown University trade policy scholar Peter Harrell summarizes additional useful points about the new tariffs on Twitter, including some additional legal objections to them. Should the new tariffs come into effect, there will likely be legal challenges, and those challenges will richly deserve to prevail.
I would add that this is just the latest of a series of efforts by Trump to usurp congressional tariff authority and impose harmful and dangerous trade restrictions that damage the US economy and poison relations with our allies and trading partners, of which Canada is one of the most important. That includes the International Emergency Economic Powers Act (IEEPA) tariffs struck down by the Supreme Court in February, in a case I helped bring, the Section 122 tariffs invalidated by the US Court of International Trade, his massive planned Section 301 tariffs, and – most recently – his threat to impose tariffs in Canada in response to wildfires there. Courts should continue to reject these dangerous power grabs and affronts to the rule of law.
Doug Bandow decries Trump’s use of the NATO summit to reinforce mercantilist policies.
Thomas Massie tweets: (HT Scott Lincicome)
The House will pass a $12 billion bailout for farmers suffering from high fuel & fertilizer prices caused by the Iran War, expensive equipment & parts caused by tariffs, and lower sales prices for commodities due to trade disputes with China.
But the GOP is fighting communism!
The Washington Post‘s Editorial Board makes clear that “the usually stodgy military industrial complex is benefiting from competition.” Here’s the conclusion:
The lesson for the Pentagon is simple: Keep the competitions coming, keep the start-ups funded and keep the primes hungry for contracts. Monopsonies tolerate and even encourage inefficiencies like hand-assembled missiles. Market discipline is less forgiving.
This paper empirically examines the impact of emigration to OECD countries on 132 origin countries’ economic institutions, as measured by the economic freedom index. We utilize public choice theory to explore how emigration can affect origin country economic freedom through voice and exit via absence, diaspora, prospect, and return channels. We then estimate the association between accumulated emigrant stocks and the subsequent changes in economic freedom and the association between contemporaneous emigrant flows and changes in economic freedom and investigate how these associations vary by emigrant skill. We find that for all skill levels, larger emigrant stocks are consistently positively associated with larger subsequent improvements in economic freedom but that at high levels of emigrant stocks these improvements diminish.
The problem arose long before 2025. When government can make or break a business, businesses will invest in making friends with government, and the return on a lobbyist will exceed the return on an engineer. Corruption and discretionary power go hand in hand.
There is a remedy, though it comes from an unfashionable quarter. Libertarians have long argued for a wall between the economy and the state: a government confined to courts, defense and a handful of public goods—too small to be worth bribing. Nobody buys favors from an office that has no favors to sell. A president who can’t reward a donor with a tariff can’t be paid for one.
The Democratic Party rejects that remedy. Its answer to the corruption it decries is personnel: Elect us, and we will staff the agencies with people of integrity. The claim deserves scrutiny rather than applause.
James Buchanan, who received the 1986 Nobel Memorial Prize in Economic Sciences, and Gordon Tullock argued in their 1962 book, “The Calculus of Consent,” that politicians and bureaucrats respond to incentives just as merchants and consumers do. Buchanan called for “politics without romance.” Voters may imagine that office transforms self-interest into public spirit, but no mechanism exists to perform that transformation. The behavior of officials is governed by what the office rewards, not by what the campaign promised.
Friedrich Hayek, another Nobel laureate, carried the argument further in “The Road to Serfdom” (1944). A state that dispenses fortunes will attract the people most eager to dispense them; positions of discretionary power select for those who relish wielding it. Screening for virtue can’t prevent that, because the applicant pool is already sorted by appetite, and the appetite grows with the budget.
The Democrats’ proposed programs would let officials choose which factories rise. Subsidies for favored technologies would let officials choose which investors prosper. Price regulation would let officials decide which companies earn a profit—and which don’t. Every one of these tools gives officials more decisions to sell, and every decision worth money to a business is a decision some business will pay to shape. A party proposing to multiply the levers of economic power is proposing to multiply the buyers lining up to pull them.
