Tariffs Rarely Work Out Well, No Matter How Fervently We Believe Otherwise

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March 08, 2016
 
 
Morning Jolt
... with Jim Geraghty
 
 
 
Tariffs Rarely Work Out Well, No Matter How Fervently We Believe Otherwise

You know that 45, or 35, or 25 percent tariff Donald Trump keeps calling for? We've already tried that on Chinese tires.

Over on the home page this morning, I point out that it didn't generate the results that everyone hoped.

Economists Gary Clyde Hufbauer and Sean Lowry note that the number of Americans employed in tire manufacturing increased from 50,800 in September 2009 to 52,000 in September 2011. If all 1,200 jobs were attributed to the tariff -- an exceedingly generous assumption -- they calculate that Obama's move could be credited with saving or creating $48 million of additional worker income and purchasing power.

But the tariff also forced consumers to spend $1.1 billion more on tires than they otherwise would have -- or roughly $900,000 per U.S. tire industry job created. And retaliatory tariffs imposed by the Chinese further hurt our economy. In early 2010, China's Ministry of Commerce imposed tariffs ranging from 50.3 to 105.4 percent on American poultry imports, which "reduced exports by $1 billion as U.S. poultry firms experienced a 90 percent collapse in their exports of chicken parts to China," according to Hufbauer and Lowry.

If you work in the tire industry, maybe you're fine with blowing up the export market for poultry producers. The problem is, putting a tariff on tires from one country is good news for tire-industry workers in a bunch of other countries, too. Forbes reported that from 2009 to 2011, "30 percent more tires were imported from Canada; 110 percent more from South Korea; 44 percent more from Japan; 152 percent more from Indonesia; 154 percent more from Thailand; 117 percent more from Mexico and 285 percent more from low volume provider Taiwan, according to the U.S. International Trade Commission."

Of course, Trump isn't proposing a tariff on just one good like tires; he's talking about slapping tariffs on all Chinese goods. That would probably just prompt U.S. companies to shift to suppliers in other countries whenever possible.

To prevent consumers from buying imported goods, a Trump administration would have to put tariffs on goods from all other countries -- and of course, all of them would retaliate with tariffs of their own. There might be some people who see this as ideal, who envision a world where American consumers go to stories and only see American-made products on the shelves.

American-made is more expensive, of course:

Brooks Brothers' American-made cashmere sport coats sell for $1,395; comparable imported ones go for $1,098. At Lands' End, American-made sweatshirts cost $59, while the ones made in Vietnam cost $25. The label on an Abercrombie & Fitch American-made sweater, which sells for $150, screams about its American origins. But most of the sweaters for sale at Abercrombie are the cheaper ones priced at $68 and up, and made abroad.

Trump is uninformed on the details of our trade relationships and has no interest in learning them. He boldly promised, "We're going to get Apple to build their damn computers and things in this country instead of in other countries" -- oblivious to the fact that Apple's displays are made in Kentucky, the processors in New York, the WiFi frequency chips in Colorado, and the power management chips in Texas.

Trump isn't running around saying, "I'm going to make everything you buy more expensive, and I'm going to destroy international trade." No, he's pledging, "I will bring jobs back from China. I will bring jobs back from Japan. I will bring jobs back from Mexico. I'm going to bring jobs back and I'll start bringing them back very fast.' Like his pledge with a border wall, it's all upside, with no acknowledgement of cost.

There's a national-security aspect to a proposal of Chinese tariffs as well: a regime in Beijing that already seems obstinate, hostile, and provocative to American interests would see even less reason to cooperate with the United States, since we had closed our doors to their products.

(Trump's trade plan quietly acknowledges the likelihood of a more antagonistic China, promising to "strengthen the U.S. military and deploying it appropriately in the East and South China Seas. These actions will discourage Chinese adventurism that imperils American interests in Asia and shows our strength as we begin renegotiating our trading relationship with China.")

Hanson: Hey, Why Did the Credible Candidates Leave the Race First?

The great Victor Davis Hanson assesses the train wreck that is the 2016 Republican presidential primary:

Three of the most experienced candidates, at least in the art of executive governance --- Bobby Jindal, Rick Perry, and Scott Walker -- were among the first to get out. The most experienced government CEOs somehow (or logically?) performed poorly in the raucous debates and lacked the charisma or the money or at least the zealous followers of Cruz, Rubio, and Trump. Or they had too much pride (or sense) -- unlike Carson, Christie, Kasich, and Paul -- to insist that they were viable candidates when fairly early on, by most measurements, they were not.

How strange that those who would have been more credible candidates saw the writing on the wall and left the field -- to those marginalized candidates who had no such qualms and ended up wasting months of their time and ours in splintering the vote, engaging in endless bickering on crowded stages, and ensuring that there were few occasions for any of them to distinguish himself. At some point, someone should confess that Democratic debates further Democratic causes far more than Republican debates help Republican causes.

We can blame the Reince Priebus, the Republican National Committee, and the teams organizing the debates. (And we will!) We can blame the no-hope candidates for jumping in, adding little to the debate, and sticking around way too long. But ultimately, this is on the Republican party's electorate. You could have seen Perry-heads, Walker-mania, or a Jindal-frenzy. It's not like these guys were hiding, and it's not like information about their vision, ideas, and records was hidden or locked up in some vault somewhere.

More Republicans gravitated to the reality-show star than anyone else.

Trump: The Only Principled Christian Choice?

One of the odder phenomena of this cycle is Evangelical Republican voters throwing their support behind a previously pro-choice, thrice-married casino and strip-club owner who bragged of his affairs with married women, kissed Rudy Giuliani dressed in drag, defends Planned Parenthood, and says he's never asked for God's forgiveness.

First Baptist Dallas Pastor Robert Jeffress appeared at a Donald Trump rally recently, saying if Trump is president, "Evangelical Christians are going to have a true friend in the White House." Jeffress added, "Any Christian who would sit at home and not vote for the Republican nominee [if it were Trump] . . . that person is being motivated by pride rather than principle."

Dr. Michael Brown asks . . .  really? The only principled Christian position is to support Trump?

You stated, "If Donald Trump is elected president of the United States, we who are evangelical Christians are going to have a true friend in the White House. God bless Donald Trump!"

But how do you know this for sure? In the recent past, he has completely reversed major positions in the course of a week, while in the course of the last debate, he reversed a previous position on immigration, only to issue a different statement after the debate.

. . .  Perhaps rather than saying, "God bless Donald Trump!" you should have said, "May God bring Donald Trump to repentance and salvation!"

He also quotes our David French:

I have spent my entire adult life advocating against abortion and working to protect the unborn. I didn't endure the taunts and jeers of my law-school classmates, work countless days and nights away from home to protect the free-speech rights of pro-life protestors, and defend the freedoms of the unsung heroes in crisis-pregnancy centers only to vote for a man who's a walking Planned Parenthood commercial.

ADDENDA: We're just starting to get those first buds of spring and . . .and . . . wait, do you sense that?

There has been an awakening. Have you felt it?

Pollen is coming.

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