President Trump’s trade policies, or perhaps the tariff parts of them, have turned out just like every economist but one predicted: They’re terrible. Unfortunately, the one economist who says otherwise is Peter Navarro, Trump’s main adviser on trade issues. I’m not even exaggerating that he’s the only one: A New Yorker reporter wrote about Navarro’s trade policies that “even with his assistance, I was unable to find another economist who fully agrees with them.” And that’s precisely because those policies are just plain wrong.
There’s now another embarrassing little report that underlines this. The Brookings Institution has gone and looked at reality — not what economic models or theory say should happen, but what actually has happened. The answer is that tariffs are, as economists always say, simply a tax upon people who buy foreign foods. No, the foreigners don’t pay the taxes; Americans do when they go to the store. Taxing people more just because they like a Chinese-made wrench instead of one made in the United States may or may not be a good idea, but it’s definitely taxing those in the U.S., not the Chinese.
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