Photograph by Nathaniel St. Clair
On July 20, citing “discriminatory treatment of American products” by the Canadian regime, US president Donald Trump signed three proclamations raising Americans’ taxes.
Again.
Trump’s latest tax hike comes in the form of a 50% tariff on Americans’ purchases of Canadian imports “ranging from wine to hockey sticks to cement.”
Tariff supporters try to sell their desired tax increases on American consumers as “retaliation” against other regimes for “unfair” treatment of goods made by American workers and exported by American companies.
Odd form of retaliation, that — “you’re hurting YOUR people … fine, we’ll hurt OUR people — that’ll show YOU!”
And for for the most part, those other regimes aren’t the manufacturers of or buyers of those exports/imports, any more than the US regime is the manufacturer or buyer of whatever the company you work for happens to export or the imported goods you choose to buy.
So no, tariffs aren’t “retaliation” for “unfairness.”
What are they, then?
They’re a way of protecting politicians’ domestic business cronies from competition, at the expense of domestic consumers.
Suppose you want a particular widget, and — all other things being equal, which isn’t necessarily so — the Canadian version of that widget sells for $1.00 while the American version sells for $1.49.
If Trump slaps a 50% tariff on the Canadian version, it suddenly costs $1.50 … meaning the US manufacturer magically becomes price-competitive with the Canadian manufacturer with the added expense coming out of your pocket rather than the US manufacturer’s bottom line.
In the past, a supposed positive feature of tariffs involved “job creation” in domestic industry, but that was always an iffy proposition and advances in automation have pretty much eliminated the “if” part.
Few if any “new jobs” get created — and the same people filling those positions are, like everyone else, paying more for the goods they want and need, while reducing the workforce available to produce goods and services that don’t need “protection” to sell at reasonable prices.
To put a finer point on it, tariff proponents and perpetrators urinate on your back and try to convince you it’s raining.
The proper “retaliation” for foreign tariffs on US goods — the response that benefits everyone except politically connected business owners and the politicians they connive with — is unilateral “free trade.”
In free markets, producers and customers drive the best deal they can … and that deal is only made if both parties see themselves as better off for having made it.
