By Robert Wenzel
When President Trump announced yesterday that he was applying tariffs on steel and aluminum, he had at his side steel and aluminum workers to show the jobs he was "creating."
On the other hand, many who are against tariffs argue that while some jobs will be "created" other jobs downstream will be lost.
But both sides are wrong in making the argument this way. Net new jobs are not created or lost because of tariffs. Markets clear, including labor markets. Tariffs may shift the job opportunities but there is no net impact on the number of jobs.
The real problem with tariffs is that it puts upward pressure on prices and shrinks supply, thus resulting in a lower standard of living for all.
Tariffs, in other words, are a shrinking economy problem and have nothing to do with net jobs.
Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.com and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics and on LinkedIn. His youtube series is here: Robert Wenzel Talks Economics. The Robert Wenzel podcast is on iphone and stitcher.
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