Tariffs are Terrible

    The Trump administration rolled out a new set of tariffs, which call for a 25% tax on imported steel and a 10% tax on imported aluminum. The ramifications of this policy have already somewhat been felt, with the stock market suffering another drop and Gary Cohn, Trump's economic advisor, resigning. However, the actual impacts of tariffs are even worse, especially compared to the long-term benefits of free-trade.
      Tariffs are a form of economic suicide. Quite simply, when the United States puts tariffs on Canadian imports, it drives Canada to impose tariffs on American imports - and this hurts the economies of both nations. In the case of the United States, making steel more expensive hurts automobile manufacturers who need steel to manufacture cars. Additionally, those same automobile manufacturers will likely see their exports taxed by the Canadian government, which hurts their business even more. The only winners, in this case, are a few steel workers - but even they will also see more expensive prices when they decide to buy a car or appliance.
     I am going to make an analogy to a wildly popular, fun, and free video game - Fortnite. In Fortnite, 100 players parachute onto a remote island in a battle-royale, in which only one player will stand victorious. Now, while the economy isn't a zero-sum game, each player is still driven by the desire to get the best loot in order to stand the best chance of success. This is similar to how each nation wants to acquire the products they need for the cheapest prices. Each player starts with just a pickaxe - not ideal for fighting. The first priorirty in Fortnite is to grab a gun of some sort, as this drastically increases your chances of survival. But what happens if two players try and grab the same gun at the beginning? They end up in a pick-axe brawl, in which one player will win, but in a highly crippled state, with only 10-20% of his health remaining. He ends up being worse off than if he just parachuted to another location and grabbed another gun.
      Similarly, if multiple nations try and specialize in the same industry - for instance, steel - they will end up hurting each other. A glut of steel in the market will drive down prices. The various nations will start trade-wars with each other and end up hurting each other's economies. Overall, they end up being much worse off, compared to if they each specialized in different areas - one or two in steel, a few in automobiles, one in computers, and so on.  Tariffs, however, are an illusion that hides the harsh reality that only a few countries, at most, can dominate one industry. Tariffs are artificial monstrosities that slash at the hand of the free-market, making it seem as if the US can bring back its steel jobs, while in reality damaging the rest of the US economy.
         Instead of going in the direction of protectionism, the US (and the rest of the world) must embrace the natural realities of the global market. There are good arguments for unilaterally eliminating all tariffs over time and letting the market run its course. For one, the price of goods would drop by significant amounts globally, which would greatly increase wealth and human development globally. Secondly, it would make the global jobs market far more natural. Sure, companies would employ low-skill labor in developing countries - but why shouldn't they? Developing markets have a much lower cost of living, and thus it is justified for a firm to pay less (compared to American workers) in order to hire workers in India or Vietnam. In contrast, high-skilled labor (which requires vast amounts of educational and technical infrastructure) would become more prevalent in developed countries such as the United States. This would allow the US to once again lead the world in technological innovation, driving the world forward on the path to progress.
          When nations specialize, everyone wins. Tariffs fundementally oppose this key idea. The only reason that tariffs even exist is because of politics - politicians get elected on far-fetched promises to "bring back jobs". The sooner that we get rid of tariffs, the better. Otherwise, the pick-axe brawl continues.


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