High-ranking economists are unanimous: Donald Trump’s plan to tax the products of companies that move operations out of the U.S. is a bad idea.
A survey of elite academic economists published by the University of Chicago’s IGM Forum Tuesday showed that none of them thought that adding new import duties on products to encourage producers to make them in the U.S. would be a “good idea.” Nearly two-thirds of the respondents strongly disagreed, while about one-third merely disagreed.
On the campaign trail, Trump has repeatedly called for tariffs on goods to stop companies from moving production out of the U.S. The Republican presidential candidate has said that he would tax the company Carrier on air conditioners it makes in Mexico after moving operations out of the U.S. He has proposed a 35 percent tax on cars that Ford makes in Mexico and sells in the U.S. And he has called for an “Oreo Tax” because of Nabisco’s relocation of some operations from Chicago to Mexico.
Those proposals, referred to indirectly in the question posed to economists by the IGM Forum, met with an unusual consensus of disagreement.
“Stupid,” remarked Austan Goolsbee, a University of Chicago professor who served as a top economic adviser to President Obama.
“A terrible idea, for many reasons,” wrote Richard Schmalensee, a professor at the Massachusetts Institute of Technology.
David Autor, the MIT professor whose research has highlighted the unexpectedly large losses that some communities have suffered because of liberalized trade with China, said the tariff proposal was “bad economics and a violation of the WTO agreement.”
