With Tariffs the US Was and Again Will Be the Unrivaled Industrial Power in the World

Economics
#1

From the linked article:

It’s not only recent history that our opinion-makers studiously ignore; it’s the fact that for most of our history as a nation, tariffs have been an astounding success.

Until the U.S. embraced globalist “free trade” policies in the 1970s, we maintained extremely high tariffs, practically prohibiting the import of many foreign products. Both GDP and consumption grew far in excess of the global average, and the U.S. became the unrivaled industrial power in the world.

Since our departure from “protectionist” trade policies, our economic and wage growth has been slower than ever before in our history, and inflation has been higher.

Predictably, Trump’s get-tough trade posture with our leftist bully neighbors has already yielded fruit. Despite a bit of face-saving saber-rattling from the leaders of both countries, Trump has already achieved two of his major goals: the movement of 10,000 Mexican troops to their northern border to contain drug trafficking and get the cartels in check and a public discussion of how both countries have gone around agreements to impose trade barriers on U.S. products while turning a blind eye to the steady flow of illegal fentanyl that is costing hundreds of thousands of American lives.

Both Mexico’s Sheinbaum and Canada’s Trudeau are attempting to boost their falling poll numbers by playing tough with Trump but will inevitably back down when their domestic producers begin to balk in a few short months. The truly desperate Trudeau has suspended elections in the hopes that using the conflict with Trump will allow him to cling to power by motivating his leftist, anti-Trump base, but that gambit is likely to fail as Trump’s popularity even north of the border continues to increase.

As Vice President Vance has reiterated, the administration’s longer-term policy is to use the tariff lever to restore American industry and to bring investment and jobs back to our shores. Despite the conventional wisdom, we are likely to see clear signs of both of these hoped-for trends before the midterms in 2026.

In the meantime, one can only take some pleasure in the slapdown of our nettlesome socialist neighbors, who have spent most of the last decade disparaging Trump and lecturing us about threats to democracy in the U.S., which is rich coming from a Mexican government that has ceded effective control of their country to the drug cartels and a Canadian government that has effectively crushed freedom of speech.

Trump has signaled that the days of taking advantage of naive leaders in the U.S. who refuse to defend the interests of our nation and its citizens are now over.

Read it all here:

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#2

Yes, the tarrifs are reciprocal - leveling the playing field, since other countries have for so long taken advantage of us through high tarrifs.
And we have allowed all our manufacturing to go overseas - especially to China - which has ruined us, as well as giving them a dangerous advantage.
Trump is restoring that, along with national security.
So of course the socialists of Canada, Mexico, and especially our own traitors the Democrat party, are going to bash him about it.

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#3

This is utter rubbish. Not being an economist, I rely on the writings of Adam Smith, David Ricardo, Frédéric Bastiat, Richard Cobden, Henry Hazlitt, and the outstanding Thomas Sowell and Milton Friedman. Sowell, Hazlitt, and Friedman were well aware of the apparent anomaly of the Gilded Age.

Take steel tariffs. These benefit some Americans, certainly - the steel producers and workers, but inevitably the same tariffs raise consumer prices and lower the standard of living. The Bush era steel tariffs in 2002 saw increased income, profits, and wages for the steel workers, but millions of American saw prices rise and standard of living fall. Everyone downstream from the tariffs, such as manufacturers of cars to toasters, petitioned Bush to rescind the tariffs. He did.
The Smoot Hawley tariffs were a disaster for America. The Trump steel tariffs of 2018 lasted about a year, I believe, before they were cancelled.
Tariffs always distort the market, lead to enmity between nations, and, despite short term benefits to some special interest groups, inevitably result in increased consumer prices and dissatisfaction.
Until this article, I have been unaware of any reputable economist, let alone a libertarian/conservative defend tariffs.
Do we never learn from history? Tatiffs are a fool’s gold.
For a more informed assessment on tariffs, I urge you to Google search YouTube videos by Sowell and Friedman.

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#4

Yes, ideally there would be no tariffs.

Bastiat made the case very well.

Trump is using tariffs as a weapon in a trade war. So far, he is winning.

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#5

Time will tell, of course. I admire Trump immensely. He is singlehandedly revolutionizing the world politically, economically, culturally, and intellectually. But, he is not faultless. His behaviour during Covid-19 (advocating lockdowns and the ghastly vaccines) was deeply damaging to Americans. Similarly, I see here, his view of tariffs could be equally horrendous. I hope I am wrong…

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#6

Ok, I’m no economist either, but from what I’ve heard, all of these countries he’s raising tariffs on already have enormously high tariffs on the US.
So how is it “free trade” anyway when they do this?
How does the US paying an over 200% tariff on butter from Canada, for example, benefit us?
The main point of his raising tariffs, also, from what I understand, is to encourage manufacturing to return to the US, which will return jobs here, to places now known as the “Rust Belt”, because they offshored all the manufacturing to places with cheap slave labor like China.

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#7

The first thing you must recognize about tariffs is that a small segment of the population will benefit at the expense of the entire population. The second thing about tariffs that most people misunderstands, is that the country imposing the tariffs, pays the increased cost.
So, in the case of Canadian tariffs of 300% on American dairy products, the small segment that benefits is the Canadian dairy farmer, but the rest of the 40 million consumers pay exorbitantly high prices for our milk, eggs, cheese, etc…
If Trump retaliates by imposing a similar tariff on Canadian dairy products, the small segment of the American population to benefit will be the American dairy farmer. The segment of the American population to suffer will be the 300 million Americans who will now face exorbitant prices for their dairy products. So when discussing tariffs, one must always determine which segment of the population you wish to benefit.

As to stimulating manufacturing in America, let’s look at Audi which recently stated they are considering moving production to the US from Germany to avoid tariffs. Sounds good for America, new factories, more jobs for American workers. So, at first glance, tariffs seem to work. But, on closer analysis, Audi will be faced with the same high labour costs, the same byzantine red tape and green tape regulations, highr prices for tariff-protected steel etc. In the long run prices for cars go up, lower American standard of living.

Here’s a more succinct response from AI to a question I put some months ago:
### 1. Smoot-Hawley Tariff Act (1930) – A Trade War Disaster

*** What Happened?**
The U.S. passed the Smoot-Hawley Tariff, imposing high tariffs on over 20,000 imported goods.
*** Intended Effect:**
Protect American jobs and encourage domestic production.
*** Actual Effect:**
** * Other countries retaliated with their own tariffs, making U.S. exports more expensive.**
** * U.S. agriculture was hit particularly hard when foreign markets closed off.**
** * Instead of bringing jobs back, it worsened the Great Depression.**

Friedman frequently cited this as an example of how protectionism backfires.

### 2. U.S. Steel Tariffs (2002) – Higher Costs, Job Losses

*** What Happened?**
President George W. Bush imposed tariffs on imported steel (8%–30%) to protect U.S. steel manufacturers.
*** Intended Effect:**
Save jobs in the American steel industry.
*** Actual Effect:**
** * Steel prices soared, increasing costs for industries that use steel (auto, construction, appliances).**
** * 200,000 jobs were lost in steel-using industries—more than the total employment in the U.S. steel industry at the time.**
** * The tariffs were removed in 2003 due to international pressure and economic damage.**

Sowell would argue this illustrates how tariffs help one industry at the expense of others.

### 3. Trump’s China Tariffs (2018–2020) – Supply Chain Shifts, Not U.S. Reshoring

*** What Happened?**
The U.S. imposed tariffs on hundreds of billions of dollars worth of Chinese imports, aiming to bring manufacturing back to America.
*** Intended Effect:**
** * Reduce U.S. dependence on Chinese manufacturing.**
** * Force companies to relocate production to the U.S.**
*** Actual Effect:**
** * Companies didn’t move back to the U.S.; they moved to other low-cost countries like Vietnam, Mexico, and India.**
** * Higher costs for American consumers and businesses (a Federal Reserve study estimated these tariffs cost the U.S. economy about 300,000 jobs).**
** * Some U.S. industries (like farming) suffered due to China’s retaliatory tariffs.**

Instead of reshoring jobs, businesses adapted by shifting production elsewhere—a classic example of unintended consequences.

### 4. Washing Machine Tariffs (2018) – Higher Prices for Consumers

*** What Happened?**
The U.S. imposed a 50% tariff on imported washing machines to protect domestic manufacturers like Whirlpool.
*** Intended Effect:**
Boost U.S. appliance manufacturing.
*** Actual Effect:**
** * The price of washing machines jumped by 12% for consumers.**
** * While some U.S. jobs were created in washing machine factories, they were far outweighed by the higher costs passed onto American consumers.**

Friedman would call this a “tax on consumers disguised as economic policy.”

### Conclusion:

History consistently shows that tariffs don’t bring industries back to the U.S.—they just make things more expensive and disrupt global trade. Instead of forcing companies to move to America, they often just shift production to other countries or pass costs onto consumers.

Sowell and Friedman would argue that if the U.S. wants to attract businesses, it should focus on reducing regulations, lowering taxes, and improving infrastructure—not imposing tariffs.

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#8

So this seems to be saying - just give up fighting globalism, because you can’t win. Just accept the reality that we are stuck in a globalist system now, where everyone must accept the fact that for cheap goods we must have the cheap slave labor places like China provide, which also makes us dependent on them for all our needs.
Yes, tarriffs may cause an initial rise in costs, but it will be worth it in the long run, by making us independent of the globalist system.
And because Trump is not just imposing tariffs, but also implementing the other things suggested by these economists - reducing regulations, lowering taxes and improving infrastructure, it should work.

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#9

Tariffs do not just cause an initial rise in tariffs, they persist as long as the tariff tax persists. Tariffs are a tax that takes money out of the hands of American consumers and into the hands of government and special interests. It’s the age old racket of robbing Peter to pay Paul. Why Trump calls this fair just makes no sense.
Free trade, no tariffs, leads to wealth accumulation and prosperity. Tariffs, for all their initial glitter, lead to fruitless autarchy and discredited mercantilism.
You should also familiarize yourself with Adam Smith’s notion of absolute advantage, and Ricardo’s concept of comparative advantage. Essentially this the idea that even if country A makes cars and shoes better than country B, it often makes more economic sense that country A should stick to cars and import shoes.

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#10

“Free trade…leads to prosperity” - but that’s the problem - we don’t have free trade to begin with!
Other countries are already putting huge tariffs on the US! Are we supposed to just ignore this?
If it’s so detrimental to prosperity for the US to put tariffs on other countries, why isn’t it detrimental for these other countries to put tariffs on the US?
It seems to me Trump, by doing “reciprocal” tarriffs to level the playing field, is bringing us closer to “free trade” than we were when the tarriffs were all one-sided against the US.
If no one wants tariffs, why don’t they all drop their own? Then Trump would drop his.
But they don’t really want free trade - they want trade that’s rigged in their favor.

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#11

You ask: "If it’s so detrimental to prosperity for the US to put tariffs on other countries, why isn’t it detrimental for these other countries to put tariffs on the US?’
That’s just the point. It isvery detrimental on those countries as well, of course. We, in Canada, have put high tariffs on US dairy products, and, thus, we pay very high prices for milk. Canadian tariffs are a tax on Canadians - not Americans. The country that lays the tariffs, pays the price.
I think, here, we part company, Liz. We can remain friends I hope!

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#12

Of course. I appreciate being able to discuss it, and your input! I’m about as far from an economic genius as you can get, so I don’t claim to understand the complexities of the problem.
I’ll try to educate myself more about it.
In the meantime, we can ‘agree to disagree’.

#13

Yes, we agree to disagree!

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#14

I have just re-read these postings, and I must apologize for using the words “utter rubbish”. Completely unnecessary and vulgar and inappropriate. Apologies.

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#15

You were not wrong. You were right to feel strongly about the issue.

You launched a vigorous debate, for which we exist. You provided interesting information about great economists’ thinking.

We all sometimes express ourselves more forcefully than we later feel we should have done. It’s okay. Feeling moves thought along.

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#16

The Mind lives on the Heart
Like any Parasite —
If that is full of Meat
The Mind is fat.

But if the Heart omit
Emaciate the Wit —
The Aliment of it
So absolute.

  • Emily Dickinson
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#17

Great poem!

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#18

Many thanks, Jillian.

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#19

A thorough and rigorous analysis of Trump’s tariffs. One of the best articles I’ve read on the subject.

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#20

Well, if he’s right, I sure hope somebody gets this information through to Trump.