The key argument for free trade is that a tariff on imports may benefit one particular industry or group of producers, but it raises prices for everyone else, including other manufacturers who import the taxed material. You think the country is getting ahead because you see the increased profits for, say, domestic steel producers. The problem, as Bastiat famously pointed out, is what you don’t see—or at least, what Trump refuses to see—namely, all of the costs that tariffs impose on other companies and individuals.
It is not too difficult to see these things, because the newspapers are reporting on them. Hence, The New York Times describes the effects of President Trump’s trade war on imported aluminum (because if you don’t have aluminum, you don’t have a country).
There are many more companies in this country that use steel and aluminum, and many more people employed by those companies, than there are that make steel and aluminum. It follows that tariffs on these commodities will help a small minority while hurting the majority. This is basic free-trade economics at work.
Donald Trump’s Trade War Is Proving The Free Traders Right
It is not too difficult to see these things, because the newspapers are reporting on them. Hence, The New York Times describes the effects of President Trump’s trade war on imported aluminum (because if you don’t have aluminum, you don’t have a country).
The Aluminum Association, which represents the bulk of the American industry, says that 97 percent of American jobs in aluminum are at what are called ‘downstream’ businesses that shape the metal into things like auto parts or other goods. Those companies are hurt by Mr. Trump’s tariffs, because they must now pay higher prices for their raw materials….
Mr. Eberhart added that his [oil field services company] will also likely be hurt by the steel and aluminum tariffs, which ‘will raise the prices for materials for drilling rigs, pipes.’
Mr. Eberhart added that his [oil field services company] will also likely be hurt by the steel and aluminum tariffs, which ‘will raise the prices for materials for drilling rigs, pipes.’
There are many more companies in this country that use steel and aluminum, and many more people employed by those companies, than there are that make steel and aluminum. It follows that tariffs on these commodities will help a small minority while hurting the majority. This is basic free-trade economics at work.
Donald Trump’s Trade War Is Proving The Free Traders Right