Right Hooks

Wait, Tariffs Cost Consumers Money?

Trump's tariff on Canadian lumber gives the Leftmedia an Economics 101 epiphany. But they still miss the point.

Nate Jackson · Apr. 26, 2017

When Democrats propose health insurance mandates, or a carbon tax, or a higher gas tax, or energy regulations, or a minimum wage hike, or a tax increase on “the wealthy” (i.e., small business owners), or any number of other burdensome costs on the economy, the Leftmedia can only coo about how fair and good those things are. But when Donald Trump slaps a tariff on Canadian lumber, the Leftmedia blares headlines about how much it’s going to cost American homebuilders — between $1,200 and $3,000 per house.

Now, to be clear, they’re not wrong about the cost, but these fair-weather free marketeers are profound hypocrites.

Whenever you tax or regulate something, and a tariff is a tax, the price of that thing goes up and the consumer pays more. This is economics 101. Yet leftists only see this when Trump’s at work.

So what’s going on here? First of all, Trump has long argued that NAFTA is a terrible trade deal for the U.S. and needs to be renegotiated. Without going through the whole history of that deal, suffice it to say that he has a point about other nations not always trading fairly — and there’s definitely a difference between free and fair. For example, Canada and Mexico both subsidize goods more than the U.S. does, which undercuts American producers.

In this case, Canadian lumber is subsidized, and it’s a dispute that has been ongoing since the early 1980s. Trump’s Commerce Department calculated its tariff rates on how much various Canadian lumber producers are subsidized. But the tariff also has to do with Canada’s own tariffs on imported dairy products, which the Trump administration argues particularly hurts Wisconsin dairy farmers. Commerce Secretary Wilbur Ross said, “The Trump administration has been much more focused on enforcement than had been true previously.”

And whether it’s trade or immigration or foreign policy, Trump the dealmaker is all about sending signals that he means business. Yes, this lumber tariff will cost Americans money, and we’re not arguing in favor of tariffs. But Trump has set about to seek what he believes are fair trade terms. Don’t think Mexico and China aren’t also getting the message.

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