Trade wars and Trump’s tariffs harm everybody

The Libertarian Party has made the following statement regarding Donald Trump’s recent tariff announcement:

President Donald J. Trump has announced tariffs on solar panels, washing machines, steel, and aluminum. Shortly after announcing his tariffs, Trump tweeted that “Trade wars are good and easy to win.” The opposite is true. Trade wars are harmful across the board, and the cost of these tariffs will be paid in higher prices, lost jobs, and a slower-growing economy. If the trade wars of the 1930s are repeated, Americans could pay by suffering through another Great Depression.

“Trade wars may be good for shoring up Trump’s shrinking populist voter base,” said Libertarian Executive Director Wes Benedict. “But every combatant in a trade war loses, just like in a shooting war — and trade wars often lead to shooting wars. Perhaps the most dishonest component of this newly initiated trade war is its transparently deceptive pretext. Trump justified the tariffs by citing Section 232 of the Trade Expansion Act of 1962, arguing that a depleted domestic steel and aluminum industry could handicap the United States in times of military conflict.”

Defense Secretary Jim Mattis advocated for a tariff that targeted only adversaries, but instead, the new tariff takes a shotgun approach that damages both allies and adversaries indiscriminately.

“Trump would be better off listening to free-trade economic advisors like Stephen Moore,” Benedict said. “Instead, he listened to anti-China polemicist Peter Navarro whose economic policy ideas are considered ‘fringe’ by his fellow economists.”

Libertarians are very clear in opposing all tariffs. From the Libertarian Party platform: “We support the removal of governmental impediments to free trade.” Republican House Speaker Paul Ryan and other congressional Republicans are attempting to prevent Trump’s tariffs, particularly the 25 percent tariff on steel and the 10 percent tariff on aluminum.

We support the removal of governmental impediments to free trade.

Even Democrats are coming down in favor of free trade and opposing Trump’s tariffs. During Sen. Claire McCaskill’s remarks at a Hannibal, Mo., Democrat Days event on March 3, she said that the tariffs on steel and aluminum would affect allies such as Canada much more than adversaries, and would invite retaliatory trade war responses that could have negative effects on Missouri products.

“I think it’s going to be brutal for Missouri agriculture,” McCaskill said, according to St. Louis Public Radio. “Canada is the number-one country for the steel that we import. It’s the number-one country for the aluminum we import. So the president’s declared a trade war against Canada, which is our most reliable important trading partner for agriculture. So this is not going to be good. We’ve got to figure out a way to stop this before it really dramatically hurts everybody in northeast Missouri that is growing beans and corn.”

McCaskill is no conservative blue-dog Democrat. FreedomWorks has scored her at only 10 percent agreement with their policy positions, and the Club For Growth scores her at only 15 percent. Her score with Council for Citizens Against Government Waste score is only 31 percent. Despite these consistently low rankings on fiscal policy issues, even McCaskill recognizes the folly of throwing a monkey wrench into our mutually beneficial system of international trade.

There’s a possibility that producers of things like corn and beans may be hurt by the inevitable retaliatory tariffs that will be enacted by steel and aluminum exporters, but it’s a certainty that every single American consumer will be hurt directly by Trump’s tariffs. Do you drink beer or soda from aluminum cans, fly on airplanes with aluminum bodies, drive cars with steel components, or buy any number of metal-intensive products like washing machines or solar panels? You will pay more as a direct result of Trump’s tariffs.

The U.S. steel industry employs about 140,000 people, according to the American Iron and Steel Institute. Economists Lydia Cox of Harvard University and Kadee Russ of the University of California–Davis report that industries using steel employ 80 times as many people as industries that produce steel. So, in order to protect 140,000 steel industry jobs, Trump is putting more than 11 million jobs at risk in industries that use steel.

As if the terrible policy weren’t bad enough on its own, a particularly egregious potential case of crony capitalism has been widely reported. Only a week before Trump’s tariff announcements, former Trump Special Advisor Carl Icahn sold a $31.3 million stake in Manitowoc, a company that buys steel.

Libertarians reject crony capitalism in all its forms, including tariffs and protectionism. Honest and free competition and cooperation among all people, with minimal government interference, should once again be the goal for U.S. trade policy. The Libertarian Party plans to run more than 2,000 candidates for public office in 2018 to help make that happen.

 

Advertisements