The Case for Tariffs

Nuance matters.

Economists generally support immigration, but to be a nation requires borders so there’s clearly some level at which we should limit foreigners. This doesn’t make one a xenophobe.

Economists generally oppose tariffs, but to be a nation requires borders so there’s clearly some level at which we should tax foreigners. This doesn’t make one a protectionist.

During the Industrial Revolution, the US had the most protected economy in the world with a tariff rate between 20% — 50%.

By 1916, we became the most powerful country in history by surpassing the output of the entire British empire! The US then pressured nations to lower their tariffs so we could more easily flood their markets.

But by the 1970s, America started to become a victim of our own success because by exporting so much stuff we made it easier to not just send our goods, but also our factories.

Overall, just as I believe in a strong border even though I’m pro-immigrant I believe in a strong border even though I’m pro-trade!

In other words, despite the fear-mongering of our globalist oligarchy I believe in borders.

Now, I don’t think we should go back to a 50% tariff rate because as economists point out tariffs reduce economic growth, which FYI all taxes do, but if we’re going to have a government then we have to tax so the only honest way to judge import taxes is by comparing them to other taxes. I think a tariff is a less bad tax than an income, corporate, or payroll tax therefore I’d like to see us raise the former so we can cut and abolish some of the latter.

Tariffs are legal under the Constitution. If we had a constitutional-size government and no welfare-warfare spending, a uniform tariff to cover the cost would certainly be a better way to raise revenue than an income or value-added tax.

I believe in an across-the-board 10% tariff.

In addition, I believe in an additional 5% — 10% “tyranny tariff” tacked onto nations that prohibit free speech such as Russia, China, and Iran because in our global economy free speech threatened anywhere threatens us everywhere. A tyranny tariff is in my opinion a more coherent way to discourage despotism than armed conflict or a hodgepodge of temporary sanctions.

But let me be clear — I’m not saying we should increase federal revenue, but simply that a greater percentage of it should come from tariffs again.

Tariffs are preferable to virtually every other federal tax because…

It’ll reduce our trade deficit. Our trade deficit is mostly due to abandoning the gold standard, but an open economic border + cheap foreign labor has increased it too.

Now, Milton Friedman was a trade deficit supporter because as he said… wouldn’t you want more stuff coming into your home than going out?

Perhaps.

But the moral question is would it be right?

I think as individuals and nations we should strive to give back 10X more than we ever receive rather than trying to game our currency so as Milton Friedman concluded, “a sustained trade deficit is the best possible outcome….we get physical goods like cars, flash memory, oil, computers, toys and all sorts of other goods for cheaply produced paper known as currency.”

In other words, we’re exporting our ability to manufacture physical goods in exchange for being the world’s paper-pusher.

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