Similarly, the promised boost to steel and aluminum production has not come to pass, with both sectors featuring lower output last year than when the duties were first imposed.
While their promised benefits have proved elusive, the tariffs have predictably succeeded in inflicting economic harm. Higher steel and aluminum costs, for example, adversely affect businesses that rely on these metals, such as manufacturers and construction companies. Duties on imported consumer goods, meanwhile, raise costs for American families and further aggravate inflationary pressures.
Retaliatory measures from U.S. trading partners further compound the damage. One government study calculated that such actions caused farmers alone to suffer more than $27 billion in lost exports between mid-2018 through the end of 2019 (which led to a bailout paid for by all Americans).
On top of that must be added the lost opportunities from Trump-Biden protectionism. For example, Trump’s decision to walk away from the TPP meant turning the country’s back on a deal that one think tank study estimated would have increased U.S. incomes by $131 billion per year. So much for that. And what further opportunities could have been unlocked if the United States hadn’t stood on the trade sidelines for the past two administrations without concluding new agreements?
Frustratingly, one hardly needed a crystal ball to foresee the failure of this protectionist embrace. Shortly after Trump’s tariffs on steel and aluminum were announced, a panel of economists was asked about their possible effects — not one agreed that they would improve the country’s welfare.
Economists have long recognized that protectionism is pure hokum. It just doesn’t make sense. Raising the cost of imported goods and services to discourage their purchase might make a few (usually politically well-connected) U.S. companies or industries better off, but it comes at the expense of everyone else.
The path to prosperity and a higher standard of living lies in making products as affordable as possible. Protectionism does the opposite. There’s a reason why economic embargoes that cut off a country’s access to foreign goods are wielded as a punishment and not a reward.
Beyond economics, protectionism isn’t doing the United States any favors on the foreign policy front either. While China has spent recent years forging new trade agreements and linkages to boost its economy and international influence, the United States has mostly alternated between sitting on its hands and actively antagonizing longtime partners and allies — an odd approach in the competition with Beijing for global leadership.
More broadly, trade openness has long been recognized as an important tool of statecraft for promoting development and calming strained international relations. Countries that prosper and trade together are less likely to engage in conflict with each other. Yet U.S. policy tilts toward trade barriers in a world with no shortage of geopolitical tensions.
The foremost reason to break from Trump-Biden protectionism, however, is a philosophical and moral one. A commitment to the free exchange of goods and services keeps with the finest traditions of a liberty-loving country whose Declaration of Independence thunders against being cut off from trade.
A belief that people should be free to buy and sell with who they like is part of the American DNA, and for the government to interfere in such trade it must have a strong justification. Recent experience shows that it does not.
