Trump proposes 10 percent universal tariff

Everyone makes mistakes. It’s part of life. It’s not even necessarily a bad thing. If you’re the entrepreneurial type, mistakes are an opportunity to learn and improve. But some people make a point of not learning from their mistakes. Donald Trump showed his stance on the matter when he pledged to enact a 10 percent tariff on all imports if he regains the presidency.

Over in the Washington Examiner, I give three reasons why this would repeat his previous trade policy mistakes:

His adviser Larry Kudlow argues the revenue would pay down the national debt, level America’s tariffs with those of other countries, and counter Chinese currency manipulation.

None of these arguments are compelling because the tariffs Trump and President Joe Biden have already enacted have sparked trade wars, throttled supply chains, and slowed the recovery from the pandemic. More of the same is the last thing America needs.

First, the national debt argument. America imported about $3.3 trillion of goods last year. Ten percent of that would be $330 billion in tariff revenue. That is a big number because it is in the same ballpark as President Joe Biden’s proposed revenue from tax increases. It is also a small number because it would cover fewer than nine months of just interest payments on the national debt. The $32 trillion of principal on the national debt would remain untouched.

Read the whole piece here. See also Iain Murray’s and my positive vision for trade policy here.