Of all the freedom-grabbing, property-destroying and future-wrecking policies that come out of Washington, D.C., few make me as angry as tariffs.
In most policy debates, both sides are represented in the capital. Politicians line up on either side of the debates over the minimum wage, gun regulation and diversity, equity and inclusion. Even on climate change, where all experts take one side, not all politicians may follow them, but at least some do. Trade is uniquely the one issue where all experts seem to line up on one side and all politicians line up on the other.
It wasn’t always like this. Among economists, the idea that free trade is good and tariffs are bad dates back 250 years to classical economist and thinker Adam Smith, who explained this concept in his 1776 book “The Wealth of Nations.”
Smith argued that trade allows people to specialize. You don’t need to learn how to make sneakers yourself, because you can buy them from Nike or Adidas. Shoe designers at those companies don’t need to learn to write software because they can hire software engineers.
The same principle applies at the group level between countries. We in the United States may have a better aerospace industry than New Zealand, but they have a stronger wine industry than we do. Trade allows the United States to focus on airplanes and not need to worry about how to make wine.
Of course, we can still make wine if we want to, and they can still make planes. However, allowing American retailers to purchase wine from New Zealand removes economic pressure to make those wines at home and allows our workers to specialize in something else, making both Americans and New Zealanders richer and better off.
Over the 19th and 20th centuries, Smith’s insights were refined and expanded upon by later economists. Today, the principles of comparative and absolute advantage are staples of every introductory economics textbook, and Smith’s predictions about free trade were turned into models that were tested extensively and verified using real-world data in a study published by the Journal of Policy Modeling. By the end of the 20th century, economists slowly gathered around a consensus that free trade is good and tariffs are bad.
For a while, it looked like politicians caught on, too. In 1980, Ronald Reagan campaigned on a promise to craft a free trade agreement with Mexico. After signing a free trade agreement with Canada in 1988, the United States, Mexico and Canada began negotiating an agreement for all three countries that would become NAFTA.
When NAFTA was finally signed under former President Bill Clinton in 1993, everyone from both parties and all sides of the political spectrum cheered with joy. Clinton said NAFTA was “just the first step in our effort to expand trade” and that he would soon meet with leaders from 15 Asian Pacific countries and then with several more Latin American countries to make free trade agreements with them, too.
For the next two decades, both major parties in the United States remained committed to free trade. Then came the 2016 election.
On the right, Donald Trump rose to prominence and, against his Republican peers, he began pushing an anti-free trade narrative. Bernie Sanders did the same on the left. Both repeated the false and nonsensical claim that trade deficits were somehow bad and Trump asserted, contrary to the prevailing opinion of every economist alive, that countries such as China and Mexico were “ripping us off.”
At the time, former President Barack Obama was set to complete his second term with the signing of a new free trade agreement, the Trans-Pacific Partnership, which included the United States and 11 other countries. But owing to Trump and Sanders’ rhetoric, popular support for the agreement evaporated and even Hillary Clinton, the Democratic frontrunner, was forced to turn her back on the agreement.
In January 2017, Trump took office for the first time, and within a week, he withdrew the United States from the TPP. The remaining countries went on to sign the agreement among themselves. Trump, meanwhile, placed tariffs on countless goods from raw materials, such as steel and aluminum, to consumer products, like washing machines and electric vehicles.
Normally, some of the tariff cost is borne by the country that imposes it and some by the country it is imposed on. But economic analyses of Trump’s first-term tariffs subsequently found that nearly all the costs were borne by Americans and not only did the price of washing machines go up, but the price of dryers did too.
Joe Biden took office in January 2021, and one might have hoped that with the presidency switching parties, tariff policy would see substantial change. Unfortunately, by this point, politicians of both parties had turned their backs on free trade, soaking up the lies of Trump and Sanders; the lessons of Smith were long-forgotten or buried deep in a garbage can. Biden kept most of Trump’s tariffs in place and even increased several of them, yet economists were mostly silent about Biden’s tariffs, likely due to the general left-wing bias of academia.
While Trump’s 25 percent tariff on Chinese electric vehicles initially helped limit their presence in the United States, with time, China got better at production. In response, Biden increased the tariff to 100 percent.
At a time plagued by our struggle against the climate emergency and our desperate need for green technology, Biden blocked us from accessing it. While China offers us high-quality, affordable electric vehicles, Americans are forced to turn them down and drive ugly gas guzzlers belching noxious, asthma-inducing gases into the air of our cities.
With Trump’s return to the presidency, all this has worsened. Three weeks ago, Trump held up a chart before the American people and lied, claiming that one of its columns contained the amounts countries charged us in tariffs and that the other merely matched them with “reciprocal tariffs.”
When questions from the press came in, the administration produced a silly post hoc equation showing that, in fact, Trump’s tariffs were purely based on trade deficit numbers and bore no relation to tariffs other countries charge against the United States. As half the country continues to repeat the leader’s propaganda, we slide ever closer to a recession.
To rescue our economy and to have the resources to tackle the world’s biggest problems, we must restore free trade policy. Unfortunately, as a decade of tariffs has now shown, politics in the United States is less about principles, truth or science, and more about rhetoric, lies and slogans of the day. Perhaps a silver lining in Trump’s war on the economy is that it may yet galvanize the public against tariffs and usher in a return to free trade. For the time being, let’s all take Smith’s lesson to heart and build up our collective outrage. We may still be able to take our country back.
Isaac Cohen is a graduate student majoring in computer science.
Views expressed in the opinions pages represent the opinions of the columnists. The only piece that represents the view of the Pipe Dream Editorial Board is the staff editorial.