President Trump’s argument for starting an international trade war is based on a socialistic-sounding plea for “fairness” and equality. Some foreign governments plunder their citizens with high tariff taxes on American imports, thereby forcing them to pay higher prices for those or competing domestic goods. The reason they are called “protective” tariffs is that they “protect” consumers from lower prices. When your foreign competitor is forced to pay a 50 percent tax on his products and you do not, you can increase your price by say, 40 percent and still underprice him. Politically connected corporations pocket this loot at the expense of their hapless, politically unorganized fellow citizens. Tariff taxes are legalized theft for the benefit of already-rich corporations and their unions (if they are unionized). They have never been anything more than yet another vote-buying scheme that empowers the politically powerful and screws the common consumer, clouded by phony rhetoric about patriotism and nationalism.
President Trump’s demand of “fairness” is as follows: Whatever tariff taxes foreign governments place on American imports, an equivalent tariff tax will be imposed on their imports into the U.S. It’s only fair, he says. This is his justification for higher – much higher – tariff taxes on imports into the U.S.
The end result of this will be an even larger degree of legalized theft as American consumers – and American corporations that use imported parts for their own manufactured products (i.e, American auto companies that import auto parts from Canada) are plundered with higher prices paid for the same (or worse quality) products. Political theft by tariff tax has always been a rob-Peter-to-pay Paul racket. How, then, is it “fair” to American consumers, automakers, and myriad other American businesses to be forced to pay higher prices? Of course it is not; it is quintessentially unfair.
There’s a saying in economics that a tax on imports is also a tax on exports. This is because if America’s foreign trading partners are impoverished by protectionist tariffs they will then have fewer dollars with which to purchase American goods in international trade, especially agricultural products. This will obviously harm American exporters and their employees and communities, This is also patently unfair. There is nothing more anti-populist than protectionist tariff taxes.
President Trump has repeatedly stated with great excitement that with his impending huge tariff tax increases “we,” meaning the federal government, are “going to take in A LOT of money.” Well now. Since when has it been the priority of the Trump administration to drain the pockets of American consumers and businesses with tariff taxes so that the federal bureaucracy can become even more enlarged and bloated than it already is. Isn’t that a flat contradiction of all of President Trump’s campaign promises, not to mention the professed goal of the DOGE?
The president can never resist boasting of his negotiating prowess and he obviously intends to use the threat of tariff taxes as his primary negotiating tool. If he really was a master negotiator who was genuinely interested in justice and fairness, he would propose the following deal to foreign governments: “We will eliminate all tariff taxes on your imports into the United States if you eliminate all tariff taxes on American imports into your country.” Just depriving the federal bureaucracy of all that tariff tax revenue alone makes this a far superior negotiating tactic than his Quixotic call for a 1930s-style international trade war.
