Tuesday, June 12, 2018

Hey EU, Don't Slap Yourself in the Face

Richard Ebeling emails:

Dear Bob,

I have a new article on the Future of Freedom Foundation website on, “The Best Answer to Trump’s Tariffs: Free Trade.”

Donald Trump has doubled down with his intention of imposing steel, aluminum, and possibly car and other tariffs on member countries of the European Union. Their political leaders have insisted that they will not be bullied or insulted by Trump and will therefore retaliate with counter-tariffs against a variety of American goods.

In this way is economic madness, with potentially damaging trade wars. In spite of their rhetoric for decades, neither the U.S. nor the Europeans have really practiced free trade, and very much to the contrary with some high import taxes on each other’s goods.

But whether it is Trump’s new tariffs or Europe’s counter ones, all that will happen is reduced freedom of choice for their respective citizens and higher prices and fewer varieties for what they wish to buy.

The right response by both the U.S. and the European Union to the protectionist policies of the other is: free trade. The 19th century British economist, Henry Dunning MacLeod, said, if another country slaps your country on the face with a tariff, imposing a counter-tariff is then like slapping yourself on the other side of the face even harder.

You end up harming the citizens of your own country far more with such trade retaliation. Better for your country to lower or abolish its own tariffs and allow the offending country to harm itself, alone, rather than exacerbating the harm the other country has done to you by, then, harming yourself.



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