Did you know? The Patriot Post is funded 100% by its readers. Help us stay front and center in the fight for Liberty and support the 2024 Year-End Campaign.

March 10, 2016

Protectionism’s Opposite Effect

Tariffs sound great to protect American jobs, but they have a high cost.

Job creation is a perpetual theme in American politics. So it’s not surprising that the topic is once again in the limelight. As part of Donald Trump’s pledge to return American jobs from abroad — a key promise, understandably, for many of his supporters — he plans to impose protective tariffs on imported goods, including a 35% tariff on cars from Mexico and a 45% tariff on all products from China. Is this a good idea?

Theoretically, higher prices for foreign goods will increase demand for U.S. products and, consequently, create jobs here at home. Nice theory, but reality doesn’t support it.

Instead, protective tariffs have historically cost American jobs while inciting retaliatory tariffs by foreign powers and increasing consumer prices.

Consider, for example, the tariff increase Barack Obama imposed on Chinese tires in 2009. While Chinese tire imports dropped by 30%, U.S. manufacturers didn’t automatically pick up the slack. As Forbes reports, from 2009-2011, “30 percent more tires were imported from Canada; 110 percent more from South Korea; 44 percent more from Japan; 152 percent more from Indonesia; 154 percent more from Thailand; 117 percent more from Mexico and 285 percent more from low volume provider Taiwan.”

“But jobs were created,” some will say. Perhaps, but there’s more to that story. As National Review’s Jim Geraghty writes, jobs in the tire manufacturing industry rose from 50,800 in September 2009 to 52,000 two years later, representing a $48 million increase in income and purchasing power. However, Geraghty notes, “the tariff also forced consumers to spend $1.1 billion more on tires than they otherwise would have — or roughly $900,000 per U.S. tire industry job created.” Plus, in 2010, China slapped a tariff of its own on U.S. poultry imports, cutting our exports by $1 billion and slamming U.S. poultry companies.

The steel industry offers another example of tariffs’ unintended consequences. In 2002, the Bush administration imposed tariffs on certain imported steel. The goal? Save U.S. steelworker jobs. As economist Walter Williams explains, the tariffs pushed certain domestic steel prices up by as much as 40% and saved approximately 1,700 steelworker jobs. But at great cost — $800,000 per job, thanks to higher prices. Furthermore, steel-using industries, such as the auto industry, bore the brunt. Williams notes, “It is estimated that the steel tariffs caused at least 45,000 job losses in no fewer than 16 states, with over 19,000 jobs lost in California, 16,000 in Texas, and about 10,000 each in Ohio, Michigan and Illinois. In other words, industries that use steel were forced to pay higher prices, causing them to have to raise prices on what they produced. As a result, they became less competitive … and thus had to lay off workers.”

Bottom line: The costs of protective tariffs far outweigh any perceived benefits. Furthermore, foreign-made goods shouldn’t be Trump’s primary concern; rather, he should look at Americans who buy imported goods. As Williams notes, “Donald Trump … can simply ask the American people not to purchase from abroad. Tyrants would never buy that strategy. Tyrants do not trust free markets and what they imply, voluntary exchange, because people acting voluntarily might not do what the tyrant thinks they should do. That is why they favor compulsion in the forms of tariffs and quotas.”

Far from helping American workers, protective tariffs harm workers in the form of higher prices and lost jobs.

We who understand that a free-market economy is best should reject government attempts to rig the market, because invariably, the die is cast in favor of some at the expense of others. For those who think protective tariffs affect only foreign economies and not the U.S. economy, and therefore are not domestic market manipulation, just remember steel and tires.

Free markets are not a threat to American Liberty; they are essential to it.

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!


The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2024 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.