This is the second in a holiday-themed series aimed at correcting common misconceptions about trade. Each day until Christmas, economists Christine McDaniel and Veronique de Rugy will address a new claim about trade or tariffs while providing additional resources for those interested in learning more about the topic.
Myth: Hiking Tariffs Is a Great Way to Get to a Zero Tariff World
No, but it is a sure way to land on Santa’s naughty list for misunderstanding the true economic case for free trade. Indeed, the economic case is fundamentally a unilateral case. In practice, a country will benefit from lowering all of its trade barriers no matter what other countries are doing. That’s because tariffs are first and foremost a penalty on the home country. When you get rid of tariffs, you help your fellow citizens. It makes no sense to argue that we should penalize the American people in the name of forcing other countries to stop penalizing their people.
- Trade Talks Episode 46: "How do Trump’s Tariffs Stack up Historically?”
- Planet Money Episode 833: "Worst. Tariffs. Ever."