{"id":91848,"date":"2024-10-10T04:00:47","date_gmt":"2024-10-10T08:00:47","guid":{"rendered":"https:\/\/quotulatiousness.ca\/blog\/?p=91848"},"modified":"2024-10-09T13:41:01","modified_gmt":"2024-10-09T17:41:01","slug":"trumps-tariff-proposals-will-rival-smoot-hawley-for-self-inflicted-economic-woes","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2024\/10\/10\/trumps-tariff-proposals-will-rival-smoot-hawley-for-self-inflicted-economic-woes\/","title":{"rendered":"Trump’s tariff proposals will rival Smoot-Hawley for self-inflicted economic woes"},"content":{"rendered":"

J.D. Tuccille<\/a> explains why Trump’s economic plans are very much a curate’s egg of good and bad ideas, but the proposed tariff plans would more than compensate for any good positive effects from the rest of his proposals:<\/p>\n

\"\"<\/a>

Willis C. Hawley (left) and Reed Smoot in April 1929, shortly before the Smoot\u2013Hawley Tariff Act<\/em> passed the House of Representatives.
Library of Congress photo via Wikipedia Commons.<\/p><\/div>\n

Former president and current Republican presidential candidate Donald Trump wants to extend the tax cuts passed when he was in the White House, which are due to expire next year. That would not just be welcomed by the many Americans who would benefit, it could boost economic activity. But there’s a big problem: The protectionist tariffs favored by Trump would undo the good done by his tax cuts, reducing rather than increasing prosperity.<\/p>\n

Tariffs Not Seen Since the Great Depression<\/strong><\/p>\n

“Former President Donald Trump’s proposals to impose a universal tariff of 20 percent and an additional tariff on Chinese imports of at least 60 percent would spike the average tariff rate on all imports to highs not seen since the Great Depression,” warns Erica York<\/a> of the Tax Foundation.<\/p>\n

Trump has actually been a little vague on the size of his universal tariff, first floating it at 10 percent<\/a> while allowing “it may be more than that”, and then upping the ante to 20 percent<\/a>. Either way, it’s a cost that ends up being largely paid by Americans in terms of higher retail prices and more expensive imported parts and materials for domestic manufacturing.<\/p>\n

The Trump administration’s 2018 “tariffs resulted in higher prices for a wide variety of goods that U.S. consumers and businesses purchase,” the Tax Foundation’s Alex Durante and Alex Muresianu<\/a> concluded.<\/p>\n

Even when tariffs don’t directly affect the cost of imported goods purchased by consumers, they still drive up the prices of many things made in the U.S. The Cato Institute’s Pierre Lemieux<\/a> points out that “a tariff on an input (say, steel) is paid by the American importer who will typically pass it down the supply chain to his customers and eventually to the consumers of the final good (say, a car)”. Instead of boosting domestic production, that can do harm, instead.<\/p>\n

“For manufacturing employment, a small boost from the import protection effect of tariffs is more than offset by larger drags from the effects of rising input costs and retaliatory tariffs,” Federal Reserve Board economists<\/a> found when they researched the 2018 tariffs.<\/p>\n

That’s not to say Trump is alone in his protectionism. Last month, Bob Davis<\/a> noted for Foreign Policy<\/em> that “the Biden administration is the first since at least President John F. Kennedy’s time to fail to negotiate a major free trade deal, instead embracing tariffs” while Trump pursued both tariffs and trade deals.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

J.D. Tuccille explains why Trump’s economic plans are very much a curate’s egg of good and bad ideas, but the proposed tariff plans would more than compensate for any good positive effects from the rest of his proposals: Former president and current Republican presidential candidate Donald Trump wants to extend the tax cuts passed when […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[25,84,7,13],"tags":[1037,188,266,1185,118],"class_list":["post-91848","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","category-history","category-usa","tag-donaldtrump","tag-electionwatch","tag-protectionism","tag-tariffs","tag-taxes"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-nTq","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/91848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=91848"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/91848\/revisions"}],"predecessor-version":[{"id":91849,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/91848\/revisions\/91849"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=91848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=91848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=91848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}