New CEI paper: Three arguments against tariffs

I have a new paper out today that explores three arguments against tariffs. They are the knowledge problem, the incentive problem, and the impossibility problem. The goal is to give tariff skeptics and fence-sitters in Congress, the media, and the public intellectual ammunition to help them shift America’s trade policy to a direction that aligns with American interests.

The first argument is the knowledge problem: the economy is too complicated for policymakers to plan. Unintended consequences, indirect effects, uncertain retaliations, and other factors mean that tariffs rarely work as planned.

The second argument is the incentive problem: tariffs give politicians a way to reward friends and punish enemies. Politicians often care more about appearances and reelection than they do about the merits of a given policy. Real-world tariffs are crafted accordingly.

The third argument is the impossibility problem: many tariff policy goals contradict each other. A tariff that blocks all imports isn’t going to raise any revenue, for example. Lowering that tariff rate could raise more revenue but would not protect its intended industry from competition. The more goals there are, the less likely any of them are to be met at a given tariff rate.

The best solution to these tariff problems is to restore the separation of powers. Tariff policy is currently coming entirely from the president. Congress needs to stand up and reclaim the taxing powers it should never have delegated to the president. And courts need to continue striking down unconstitutional executive power grabs.

Read the whole paper here.