“What will you say about Trump and his tariffs if he gets high-tariff countries to zero?” Trump supporters have asked the previous question endless times since “Liberation Day” and surely before. The answer is simple: we’ll be worse off.
We will be because the question is nonsensical. Americans will be the losers of Trump’s tariff war precisely because Americans were the clear winners of the tariff imbalance that prevailed before Trump’s fear of imports got the best of him.
Never forget that the sole purpose of production is to import, to get, and the low taxes on foreign production meant that Americans were getting abundantly. The losers were the individuals in the foreign countries that had to sometimes pay higher taxes to acquire American plenty. They were hurt twice.
Not only was it more costly to exchange the fruits of their own labor for American production, they were less productive in pursuit of American production. When taxes on foreign goods keep existing jobs in place, they’re the same as governments shielding their citizens from the genius of work divided. Work divided is how we specialize, and in specializing, how we enhance our individual productivity on the way to greater and greater acquisitiveness. And yet there’s more.
In doing the work that most associated with their unique skills and intelligence, Americans were the winners yet again as the world’s producers fell over themselves to match their savings with Americans doing what they do best. Tariffs on American goods arguably aided this pro-American state of play. Owing to at times high taxes on American exports, the incentive was substantial for great American businesses to conduct high-margin product design stateside, all the while leaving the low-margin manufacturing to the rest of the world.
Only for Donald Trump to use power he likely doesn’t have to rearrange what was hugely beneficial to Americans. Which is why Americans will be the losers of a trade war that Trump should never have started. For one, Trump chose to damage Americans twice (see above) as retaliation for other countries damaging their people twice.
Second, in retaliating against foreign countries for harming their own people Trump shrank the economic freedom of the American people. Since when are conservatives and Republicans so anti-freedom, and if the idea is to “protect workers” from foreign production, since when are conservatives and Republicans so socialist?
Third, U.S. businesses that freely globalized production to their betterment are now bringing it home not because it improves them, but because it improves them in the eyes of an increasingly protectionist, interventionist, and collectivist GOP.
Most important of all, the offshoring of American production didn’t put Americans out of work as much as it greatly enhanced the quality and pay of their work. Incontrovertible evidence supporting the previous claim can be found in the decades-long surge of imports into the United States that gave people like Trump the vapors. Sorry, but production always and everywhere buys production, and soaring American production that was very much aided by a lack of tariffs made the U.S. the world's biggest magnet for global production. If that's not winning, what is?
Yet we’re supposed to believe all will be well if Trump negotiates great trade deals, and gets other countries to zero. No, not really. Actually, not at all. Stop and think what we lost to maybe - maybe - get to zero. Now we’re less free, less productive, and we’re much smaller in the eyes of the world for acting so petty. One guesses the excitement of getting all things American in the future will reflect this less free, less prosperous, and pettier truth.
