For every one of us conservatives and libertarians who voted for then-candidate Donald Trump, there has been one question lingering in the back of our minds ever since he became President: How conservative is he really?
We may be seeing our answer play out, and it is not good.
Republican President Donald Trump has recently been speaking out in open opposition to Republican members of Congress on a few key issues. He has expressed his support for drastic measures regarding gun regulation, including raising the legal age to buy guns to 21, and he has even joined the leftist bandwagon of attacking the NRA.
If only it stopped there. Trump has now stated his intentions of imposing his long-awaited — and for conservatives, our long-feared—protectionist policies. Trump detailed a new policy that will impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.
“What’s been allowed to go on for decades is disgraceful. It’s disgraceful,” Trump said in his statement. “When it comes to a time where our country can’t make aluminum and steel… you almost don’t have much of a country.”
Trump also tweeted about the issue, saying:
“Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!”
It largely has been reported by the media that many of Trump’s aides were caught off-guard by his announcement. This may speak volumes to the overall disapproval of the move by many of his staff members.
It is unclear whether some countries will be exempt from the tariffs. This move will likely cause other countries to counter the tariff, sparking what some would describe as a “trade war.” Republican Senator John Cornyn of Texas expressed just these fears, saying that he is “obviously concerned about retaliation and unintended consequences.” Trump’s own economic advisers have also been warning about retaliation from other countries.
Despite the fears of Cornyn and other Republicans, steel and aluminum industries unsurprisingly supported the President’s decision. “This is vital to the interests of the United States,” said Dave Burritt, CEO of the US Steel Corporation. “This is our moment, and it’s really important that we get this right.” Steel industries have also been hinting at a bonus for their employees if the tariffs are passed.
Moving away from CEOs and politicians to a more important question: Where do American consumers stand in this debate? Tariffs have been imposed in America before and the effects have long been studied and noted. Raising tariffs causes higher prices for domestic markets and adds nothing substantial to the overall growth of the economy.
Adam Smith wrote The Wealth of Nations in 1776, which argued the case for free trade policies and have been hard to dispute since. As explained by the World Bank, from 1990 over one billion people have been raised out of poverty, and this has largely been due to the adoption of free-trade by many of the world’s nations.
So why do some people–like Senator Bernie Sanders and our current president–feel as if they know better than time-tested facts?
The argument for tariffs rests on the assumption that if you prevent consumers from importing goods from foreign nations, consumers will, in turn, buy those goods from domestic markets. Following this argument, the market for that good will then rise at a high enough rate to offset the cost of imposing the tariff by creating more domestic jobs.
This assumption falls short of any evidence.
Tariffs harm the country importing the goods and drive down the domestic economy by forcing consumers to pay higher prices, essentially making tariffs into taxes for anyone in that particular market.
This is not the first protectionist policy Trump has put in place. In January he imposed unsubstantial tariffs on Chinese and South Korean markets of washing machines and solar panels.
We can be sure that these policies will not end with steel and aluminum unless his voters make it known that protectionist policies will not be accepted.