Nov 19, 2018
The Vicious Cycle of Tariffs
Post by Freedom Partners
The Trump administration’s tariffs were imposed, in part, to cut down on foreign trade malpractice — like the state-subsidization of Chinese industries. Instead, they can contribute to this very problem, while inflicting economic harm on families and entrepreneurs.
- We impose tariffs on imported goods from China.
- China retaliates with tariffs that limit the export of U.S. goods to China.
- These tariffs hurt our country’s businesses – farmers included.
- Taxpayers fund assistance to farmers hurt by tariffs.
- To pay for this aid, we borrow money from the Chinese.
- Some of that aid money goes straight to Chinese-owned companies located in the U.S.
In other words, we pay our farmers not to sell their produce to China using money borrowed from China — which can end up going to Chinese businesses, anyway.
The simpler — and more effective — solution to our trade disagreements is to pursue a zero-tariff environment. Free trade helps both American businesses succeed and consumers to purchase a wide array of goods at lower prices.
Through tariffs, we ensure that a few well-connected businesses succeed at the expense of most others, while consumers can expect fewer goods — and higher prices for them.
Free trade avoids those pitfalls. It’s time we drop our tariffs.