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Next month, thanks to the tax bill signed by Donald Trump, many Americans will see more money showing up in their paychecks. They should contain their enthusiasm. It won't be long before his trade policy starts removing that money from their wallets.On Monday, the president imposed hefty tariffs—taxes, that is—on imported washing machines and solar panels. They will be set at a minimum of 20 percent and a maximum of 50 percent on washers and at 30 percent on solar equipment. Rest assured, the duties will boost prices accordingly.That's not a minor side effect; it's the central purpose. By pushing up prices, the Trump administration hopes to make it easier for companies in the United States to compete with overseas firms while also charging more than before.The president, whose ignorance of economics is bottomless, has the idea that punishment of foreign producers is the key to our prosperity. His conviction is that when you protect an industry, you cause it to grow, reaping a bounty that will enrich the entire economy.It's an old superstition that has been debunked in the real world over and over . . . When George W. Bush imposed duties on foreign steel, experts concluded, he destroyed some 200,000 jobs in other sectors—exceeding the total employment of the American steel industry.Barack Obama chose to ignore that unhappy example. In 2013, he took action against tires from China. But tire-makers in other countries stepped up to fill much of the gap, and the American economy paid a price. A study by the Peterson Institute for International Economics found that consumers paid $1.1 billion and no more than 1,200 jobs in the American tire industry were preserved . . .
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Topic: Trump Repeats the Folly of Protectionism (Read 324 times)
