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Tariffs Are Wealth Destroyers
[Mises] On January 31, 2025, US President Donald Trump announced that he would impose a 25 percent tariff on imports from Canada and Mexico (except for Canadian crude oil and energy imports, which will be subject to a 10 percent tariff) and a 10 percent tariff on imports from China. Tariffs are taxes on things that Americans buy from producers in other countries.OR, they are negotiation weapons in getting other countries to drop their tariffs and policies that hurt American trade One would have thought that out of all people, President Trump—who prides himself on placing America first—would never consider imposing tariffs. After all, a tariff on any imported good implies curtailing the supply of less costly goods and encouraging the supply in a domestic market of more costly, domestically-produced goods (i.e., punishing the domestic consumers: the Americans). In his Economics in One Lesson, Henry Hazlitt quotes Adam Smith, It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it their interest to employ their whole industry in a way in which they have some advantage over their neighbors, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for. What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom... Given that President Trump considers himself as a successful businessman, he surely must be well aware that the ultimate goal of every business is to make profit. Hence, to succeed in this task as a businessman, Donald Trump will not allow activities that would undermine the net worth of his company. Yet the President is of the view that this is acceptable for the economy as a whole. If policies such tariffs weaken the process of wealth formation and undermine individual well-being, obviously this is bad news for the economy as a whole, which President Trump holds as number one on his priority list. President Trump is of the view that, through tariffs, he can make the US economy prosperous... CONCLUSION The imposition of tariffs is going to hurt the American consumers. This will stifle trade between the US and the rest of the world. It will undermine the process of wealth generation. According to Mark Hendrickson--Trump's First Big Economic Mistake: In 1850, Frederic Bastiat wrote in his classic essay, "The Law," that tariffs are a step toward socialism. In his words, "protectionism, socialism, and communism are basically the same plant in three different stages of its growth." All three call for government to intervene in the marketplace to influence who gains and who loses. Related: Tariff: 2025-03-05 Furious Justin Trudeau calls Donald Trump's tariffs ''dumb'' and vows to escalate trade war Tariff: 2025-03-05 Honda moves Civic production plans to Indiana from Mexico to avoid tariffs: report Tariff: 2025-03-04 China to impose retaliatory Tariffs up to 15% on US Goods starting March 10 Posted by: DooDahMan 2025-03-06 |
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