Perhaps it should have been a remedial class because the president has just announced another increase in taxes on steel and aluminum from Canada.
This is insanely bad economic policy for the simple reason that there are not that many metal-producing jobs in America compared to the number of jobs that use metals as inputs.
I recently wrote about how Trump’s steel taxes would hurt the economy because so many net jobs would be endangered.
Well, as you can see from this chart, the same is true with regards to Trump’s tax increase on aluminum.
I’m not a math genius, but endangering more than 10 million jobs to help 60,000 workers does not seem like a good deal
Which is why today is a perfect opportunity to share this column by Dan Hannan.
Can I be so glib in dismissing the intellectual arguments for protectionism? Yes. Their lack of internal coherence should disqualify their advocates from being taken seriously. Supporters of tariffs make a series of claims that are not only false but are logically incompatible with one another. …they make three main claims. First, that tariffs will bring in revenue, allowing taxes to fall — or spending to rise. Second, that tariffs will bring jobs to America — or bring jobs “back,” as they usually put it, though more people are in work today than ever before. Third, that tariffs are a negotiating tool, a way to make other countries open their own markets. For what it’s worth, each of these claims is untrue. Tariffs are not an alternative to domestic taxation, but a variety of it. They destroy more jobs than they protect. The proposed 25% aluminum levy, for example, will cost 100,000 jobs according to the aluminum company Alcoa — 20,000 in the smelters and 80,000 in industries that use aluminum. …And they are a terrible negotiating tool. Harming yourself is never a wise way to convince others, and many of the retaliatory measures imposed on America in 2018, including in China, Europe, Turkey, and India, remain in place. …More than 200 years have passed since David Ricardo proved, as a matter of mathematics, that free trade always benefits the weaker and the stronger participants. …It is what P.J. O’Rourke was getting at when he described protectionism as an IQ test rather than an ideological test.
Too bad America currently does not have a president who can pass this test.
Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.
