Trump, your helpful Tariff Man

I admit it. As a student of American political history, I always found domestic tariff battles to be of keen interest. That most others found them to be a somniferous bore was their business; I never proselytized. Perhaps I should have, though, since the history of U.S. tariffs is largely the history of American government, politics, economics, sociology and culture.

From the Tariff Act of 1789 and subsequent tariff legislation throughout the 19th century, the taxation of foreign imports provided the vast bulk of federal revenue; represented a fundamental schism between Hamiltonian and Jeffersonian concepts of America's future, which in turn contributed to the rise of our two-party system; created sectional enmity betwixt the Northern manufacturing base and the South's agricultural rustics; and provided me, as a child, stories from my father's childhood about the decrepit old men, Democrats and Republicans, of his small Missouri town, raging at each other over politics — in which tariffs had to play a part — as would a sane person vs. a Trumper today.

Oh dear, I see I have referenced Trump, that malevolent blight of "A Tariff Man" who, along with his benighted followers, knows as much about U.S. tariff history and the effects of contemporary tariffs as does a one-cell organism. Yet as luck would have it, for those of us who actually care about this country and its economic place in the world, the Federal Reserve has issued a precise study about the effects of Tariff Man's blundering. I give you its key findings:

* We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices. 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.

* While one may view the negative welfare effects of tariffs found by other researchers to be an acceptable cost for a more robust manufacturing sector, our results suggest that the tariffs have not boosted manufacturing employment or output, even as they increased producer prices. [Simply put, the Trumpian premise of acceptable gain/loss is as valid as was Republicans' promise of a deficit-neutral tax cut.]

* In addition, our results suggest that the traditional use of trade policy as a tool for the protection and promotion of domestic manufacturing is complicated by the presence of globally interconnnected supply chains…. We find the impact from the traditional import protection channel is completely offset in the short-run by reduced competitiveness from retaliation and higher costs in downstream industries.

In other words, Trump's tariff policies have been not only a bust; they have effectively reduced employment in the manufacturing sector — i.e., they've screwed the very blue-collar workers who recklessly threw the dice in 2016 — and have cost innocent consumers more.

The Tariff Man. What a guy.

Comments

[Peter G]

That particular aspect of political history would certainly not be everybody’s cup of tea. And yet the same arguments resonate throughout Canadian political history and economic policy since Confederation. I always found them fascinating.myself. There is little doubt today though about which way the argument goes. The days when protectionism was a defensible economic policy are gone. At best they can be used as a counter in trade negotiations to secure freer trade. As an end itself it must fail.

[jsrtheta]

The TPP would have allied us in trade with a lot of Asian countries looking for protection from China. Trump nixed that and went with tariffs.

Now our would-be TPP partners are looking to work with China on trade, and we're out in the cold, getting crucified by what our tariffs have wrought.

What an idiot.

[David Duff]

So, given all that, why aren't the Dems doing better in the polls?