No. of Recommendations: 54
Here's another take, by a well respected person, Victor Davis Hanson.
https://amgreatness.com/2025/04/10/ten-tariff-ques...
"The real trade war wasn’t Trump’s—it was decades of lopsided deals, deficits, and double standards America tolerated while others profited."I am sure, say, Pol Pot was well respected by some people. Mr Hanson may have fans, too--I can't say you're wrong about him being "respected"--but he is clearly an economic illiterate.
The US deficit is NOT caused by the behaviour of non-US trade partners, whether "fair" behaviour or "unfair". It is caused because the US consumes more than it produces. The total income of private US entities (individuals and corporations), plus the "income" of levels of government (taxes), is simply lower than the aggregate spending of that same group. So the difference is borrowed from abroad, to pay for the "extra" consumption/spending. This would be fixed with a bit more savings and/or a bit more taxation within the US. Nothing any other country does or does not do will change that. Other than, perhaps, declining to lend more money to the US.
Separately, dissing non-US countries for unfair trade practices is in some ways justified...every place on earth has its little favourites and it's hard to persuade them to move towards a level playing field. The WTO and GATT before it did an admirable job over the decades getting a bit of rationality into things, getting overall tariffs and barriers gradually ratcheted down in the face of generally economically illiterate politicians listening to local special interest groups. Not many people have read their Bastiat.
But one should not think the US is any kind exception in this regard--some US tariff and non-tariff barriers are in some ways among the world's most egregious, often ranging from dire to the absurd. Check how much it would cost a non-US sugar producer to ship a new 23-cent pound of white sugar to the US. The answer: a tariff of 15.36 cents. Such an import is in effect banned, causing the existence of the high fructose corn syrup industry, which would not exist in other circumstances, since it's very inefficient. There was a spat with some European countries in the 1960s about US chickens, so the US slapped a temporary 25% tariff on pickup trucks ("the chicken tax"), which is still in place, having caused massive distortions to both the US and global automotive industries. The US hates following mutually agreed rules so much that they have in effect shut down the WTO, refusing to allow any members to be appointed to the appellate body, which became inquorate and ceased operation in 2019.
The most predictable effect of tariffs is to cause the industries getting the protection from competition to become more inefficient, which of course means they export even less. And of course retaliation, which has the exact same result. History shows that raising tariffs may indeed cause imports to fall, but they generally cause exports to fall even more, so they don't improve the balance of trade. India in the 1970s-1980s is a fine example of the effect. No--if you want to move in the direction of a trade surplus, just engineer a savings surplus or raise taxes a bit. Conversely if you want a bigger trade deficit in goods and services, cut taxes and (optionally) raise tariffs.
Jim
