Reductio ad absurdum is a rather potent tool. You take the premises of someone’s flawed argument and push them to their extreme. Everyone can see it doesn’t work, and you’ve destroyed the argument. Consider minimum wage laws. As long as the legal minimum wage is below the market wage, no harm no foul. When it raises above the market wage it messes everything up. “But,” the economically illiterate cry, “everyone deserves a living wage. People need to make at least $15 an hour. Let’s pass a law.”
OK. If the law can create jobs that pay above a certain level, why stop at $15? Shouldn’t the government, if they really cared about us, make the minimum wage $15 million an hour? Whatever objection you have for the latter will apply to the former.
The same principle applies to tariffs. I admit they look like a brilliant idea, if you’re only looking at part of the equation (just like a $15 million an hour wage requirement). It’s terrible that those Japanese sell better cars for less money than American manufacturers. It’s evil that Canadian lumber costs less than American lumber. How dare those Germans build superior, cheaper cuckoo clocks to our American made ones? Something must be done.
You should be able to see the problem already. Tariffs are built on the premise that the way to prosper a nation is to have its citizenry pay more for inferior goods. If foreign goods, without tariffs, dominate a market, what explanation could there be other than the foreigners who made the goods do it better and/or cheaper? And wouldn’t it help the economy for us to buy goods that are better and/or cheaper?
But wait. There’s more. Every good that is imported to this country has a corresponding good that is exported from this country. Those trucks bringing lumber, those ships bringing cars and cuckoo clocks to the United States do not return empty. They return with the goods that Americans are able to produce better/cheaper than those nations that import our exports. Every job you “save” by driving out foreign competition is a job you lose for a company that beats foreign competition overseas. You are losing better jobs to save worse jobs.
Back to the experiment. If tariffs are such a boon to the economy, why these petty halfway measures of 25% or 50% tariffs? Why not charge Japan $1 million per car they wish to import here? Why not charge Canadian companies $1 million for every two by four they want to send here? Think of all the tariff income we’d bring in.
The free market is that market which will always and everywhere maximize prosperity. Every form of tinkering with it by the clumsy hands of government will throw sand in the gears, every, single, time. You might make a case that this form of taxation is less destructive than that form of taxation. What you cannot do is claim that any form of taxation creates a net gain for the economy. Tariffs are intrusive, expensive, oppressive government over-reach, something I thought we’d decided to put behind us.
This is part and parcel of what it means to love your neighbor. You don’t ask the government to make them pay an extra tax so that your business can beat his business. You encourage the government to stay out of your neighbor’s business.