The Trade War Isn’t Over
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The Trade War Isn’t Over
In addition, the Smoot-Hawley Tariff Act, which imposed tariffs to discourage imports, led other countries to retaliate in kind and is seen by many observers as having deepened the…
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Richard Haass • The World
New results on tariff history do not favor protectionism - Marginal ...
marginalrevolution.com
running huge trade deficits with the entire world year after year for decades. There are two exceptions to the understanding that bilateral deficits don’t matter. First, the content of trade can be important. For example, it is not in the interest of a large manufacturing economy such as the United States to ship basic materials overseas in exchang
... See moreRobert Lighthizer • No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers
Mr Trump’s dalliance with tariffs in his first term already shows that they did nothing to narrow America’s trade deficit. One reason is that the dollar tends to strengthen when tariffs are applied. The first-order effect of tariffs is to reduce American demand for imported goods, leading to less demand for foreign currencies. But when fewer dollar... See more
Americans consume far too large a share of what they produce, and so they must import the difference from abroad. In this case, tariffs (properly implemented) would have the opposite effect of Smoot-Hawley. By taxing consumption to subsidize production, modern-day tariffs would redirect a portion of U.S. demand toward increasing the total amount of
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