by resters | 2025-05-24 13:55:06+00:00
Tariffs and other ideas associated with economic nationalism place politics ahead of the economic freedom of citizens. They declare that economic activity is something that must be stewarded and managed by politicians, and that citizens are too foolish to be allowed to have economic freedom, and that all should sacrifice for the benefit of those chosen by political leaders to benefit from heavy economic restrictions.

For comparison, China applies the minimal amount of economic protectionism it deems necessary to achieve its industrial policy goals. The crucial fact about China's approach is that China's leaders do not make silly claims to sell the idea to a naive public, they cite specific, highly targeted industrial policy goals and interfere in the economy as little as possible. They acknowledge the sacrifice that tariffs require and assert that the industrial policy goals are worth it, they do not make false claims about who pays for tariffs.

On the contrary, protectionism in the US is a blunt and emotionally wielded instrument that is deployed haphazardly and then suddenly repealed, then deployed again amid rhetoric that the US is a victim and has been taken advantage of, and the emotionally reassuring and politically priceless falsehood that foreign companies pay the cost of tariffs.

The costs of recent tariff antics in the US is clear as the economy must now price in the risk of unpredictable and haphazard tariffs along with other systemic risks. Absent from the discussion of tariffs in the US is any coherent idea of industrial policy, any forward-looking or coherent perspective on what should be done to prepare for the future, etc.

US tariffs are a purely emotional ploy meant to build up nostalgia for bygone days of US heavy manufacturing. The "us against them" rhetoric and the victimhood rhetoric is just a bonus that (sadly) sells well politically in the US these days.

It is not only counter-productive and directly harmful to the US economy, it is also deeply embarrassing that the world has to witness the US self-immolating in this way, hitting our own knee-caps with a hammer, destroying wealth and trust that many people worked so hard to create.

Economists don't favor tariffs for one simple reason: Economics is a science and there is overwhelming evidence telling us what will happen. Better policy ideas exist such as targeted industrial policy (such as that done by China) but the US ignores them in favor of the most emotional and reactive posturing imaginable.

It should already be clear what happened. Trump made a lot of claims about "deal making" and tariffs. Many of the claims were contradictory from the beginning, meaning if one was true the other could not be true. Supporters are not bothered by that because the appeal is emotional rather than logical. Now we've seen many tariffs get deployed, we've seen markets tank, companies cancel orders, reverse course, hold back on investment decisions. Then we've seen the tariffs get walked back amid bluster and rhetoric. Some economic numbers improve in response to this but not all. It's like the last spasms of a dying creature -- is it an attack or a retreat? Neither or both?

All this stems from a deep misunderstanding of American power and American greatness. Misunderstandings like this are easy in a society so heavily influenced by just-so stories and propaganda, societies like ours in which the state religion, American Exceptionalism, is irresistable to so many.