The subject of tariffs is all over the news lately due largely to the President’s action to impose them on imports of steel and aluminum. One can make the argument that some domestic industries need to be protected for national security reasons. In such cases, some would argue that the best method of protection for favored industries is a direct subsidy (remember Solyndra?) and not import tariffs.
Independent economists without a political agenda are almost universally opposed to tariffs. I have seen so many articles and columns denouncing tariffs in the last couple weeks, that if I blogged about them all, it would literally take you hours to read them.
I will spare you, and your eyes, by only providing links to three that are representative of economist points of view.
On February 18, 2018 Mark Perry reported about a blog post by the Cato Institute’s Dan Ikenson called, “Trade Deficit Disorder.” He discusses in depth the U.S. Balance of Payments (note the word – balance). Here is the link: Dan Ikenson on the media’s and Team Trump’s ‘trade deficit disorder’
Next, please click on the following link to view a Milton Friedman video discussing monopolies: Milton Friedman - Monopoly
This last article goes right to essence of the tariff and trade controversy. This is an op-ed in the New York Times by Greg Mankiw that was also reported on Carpe Diem February 18: Greg Mankiw: The benefits of world trade are obvious. Any good student of Econ 101 can explain it to Trump
As always, please call with any questions.
Until next time, cheers!
Jim