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As every economist readily acknowledges, whether they’re on the left or right, the source of treasury revenue they bring in is Americans. When there’s a tariff on steel, for example, American businesses and the consumers they serve end up paying more for imports as a result of the tariffs. It’s essentially a new tax that’s filtered through foreign companies but paid for by Americans.
That’s why this Tweet by the President misses the mark:
Tariffs on the “dumping” of Steel in the United States have totally revived our Steel Industry. New and expanded plants are happening all over the U.S. We have not only saved this important industry, but created many jobs. Also, billions paid to our treasury. A BIG WIN FOR U.S.
— Donald J. Trump (@realDonaldTrump) January 28, 2019
I would be okay if the President said something like, “The tariffs I have imposed are pressuring foreign governments to come to the table and negotiate free trade agreements that will make America more competitive on the global market. Free trade agreements coinciding with reduced regulations and lower taxes will put America’s economy on the path towards domination once again.”
Instead, this Tweet indicates the President only sees one side of the tariff play, which means they’re not being used as negotiating tools. They’re being used as revenue sources.
Supporters will say that they are creating jobs, but here’s the thing. The jobs “created” by tariffs are actually traded for other jobs. Steel jobs might increase, as the Tweet points out, but jobs at companies that rely on steel will invariably decrease. Whether it’s cuts in hours, loss of jobs, or even closing plants themselves, the negative effects of tariffs make the benefits to individual industries a wash at best.
Tariffs do not create jobs. They pick winners and losers. They facilitate job creation in some industries while reducing job viability in others. Free trade has always been a conservative principle because it works. The new “fair trade” GOP has lost its way.
Image Source: Medium
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