What! A Free-market Economist That Supports Tariffs?Michael Busler
May 01, 2022
Free-market economists have always favored free trade. That means there are no quotas or tariffs imposed by any country on any product. The theoretical outcome is that all countries benefit by producing goods that are produced most efficiently and then trading for other products with countries that have a comparative advantage.
In other words, the U.S. produces wheat extremely efficiently. Columbia produces coffee very efficiently. If the U.S. produces just wheat and Columbia produces just coffee, the total output of the two countries would be greater than the total if each country made each product and did not trade.
If they trade fairly and freely to meet the country’s needs for the product they are not producing, both countries end up with more. Everyone wins.
There are some downsides. Free trade often results in a structural unemployment problem. That occurs when the newly created jobs are not filled by the unemployed because the skills don’t match. If the U.S. stops producing coffee, coffee workers become unemployed. The expanding wheat industry needs workers. If the skills of the unemployed coffee workers don’t match the skills of the wheat growers, a structural unemployment problem is created.
If one country is starting to see their entrepreneurs investing in a new product that is currently being imported, the foreign competition is often able to take actions that make it nearly impossible for the new firm to exist. So new domestic industries suffer.
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The prior administration and then the pandemic changed many economists' view of free trade. In 2017, the administration examined the various trade agreements the U.S. had. In every case, the agreements were slanted in favor of our trading partners and to the detriment of U.S. interests.
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Source:
https://townhall.com/columnists/michaelbusler/2022/05/01/what-a-freemarket-economist-that-supports-tariffs-n2606538
