Mar 22, 2018

Tariffs Are the Wrong Approach to Improving Trade With China

Donald J. Boudreaux Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics

President Trump today took America, and the world, on a big step backward - a step that endangers the global trading system that has done so much over the past 70 years to enrich Americans and non-Americans alike.  With his unilateral imposition of punitive tariffs on imports from China (which, let’s be clear, are punitive taxes on Americans who buy these imports), Mr. Trump is bestowing special privileges on a small handful of American firms while putting in peril the fortunes of countless other U.S. producers whose costs will rise as a result of the higher prices they will be forced to pay for inputs.  In addition, the costs of living of all Americans will unnecessarily be hiked.

Whatever the merits or demerits of the Trump administration’s complaints about Chinese trade practices, this unilateral act is rash and irresponsible given that the World Trade Organization's dispute-resolutions procedures have not yet been given time to work.

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