“I am a tariff man,” said the Republican president. He based his strong support of tariffs on the idea that industries within the U.S. needed “protection” from foreign competition. A vocal opponent of free trade, his view was that America could tax its way to prosperity. Prices on consumer good rose, which helped to cause the Republicans to lose their majority in the House. But “tariff man” never wavered from his protectionist impulses, no matter how much damage they caused.
By “Tariff Man” I’m referring, of course, to our 25th president, William McKinley.
History never repeats itself, as the old adage notes, but it sometimes rhymes. A prime example is a recent tweet by President Trump, which sounds like it came from the 1890s:
I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
Such economic ignorance was already inexcusable when McKinley (then still a congressman) imposed his Tariff Act of 1890. But it’s truly baffling how anyone living in the twenty-first century could think raising taxes on America consumers is the way to make America rich again.
Normally, a policy that has been repudiated by empirical evidence for more than 100 years would never even be considered. But as history has shown, politicians tend to have more power than sense. And because we give the executive branch too much power, there’s not much we can do about it but complain.
But complain we should. There comes a point, after all, when such economic ignorance becomes a matter of immorality. As the Heritage Foundation’s Logan Kolas and Patrick Tyrrell pointed out last year, tariffs and regressive trade policies hurt the poor:
While all Americans stand to benefit from free trade, we must not lose sight of who has the most to lose.
Tariffs are just taxes on Americans by another name. However, some Americans shoulder a larger burden under protectionism than others.
Unlike our progressive income tax, taxes on imports (tariffs) are regressive and take a bigger percentage of income from poor families. Lower-income individuals and families thus may bear a significant burden from tariffs, while those of more comfortable means are not as affected.
In fact, cutting tariffs could be the biggest tax cut low-income families will ever see.
As I noted last week, Trump’s latest round of tariffs will decrease economic growth and increase unemployment. They will also cost households to suffer losses equivalent to $2,357 per household, or $915 per person.
For a multi-millionaire like President “Tariff Man” Trump, losing $915 a year is no burden. But for most Americans—and especially for the working poor—the tariffs are going to make their lives even more difficult, and push them deeper into poverty.
There may not be many economic policies that all American Christians can agree on, but refusing to allow the poor to be harmed by discredited 19th century mercantilist policies should be one of them.
Image source: Wikimedia