If you want to drain the swamp, stop letting tariffs feed it.
There are plenty of reasons to oppose tariffs, in theory and in practice — most prominently because they impose higher costs on consumers, workers, and businesses. What’s less reported, though increasingly problematic, is that their proliferation has empowered government bureaucrats ill-suited to the task to pick industry winners and losers.
After years of stagnation, our economy is a great success story that is working for most Americans. Thanks in part to the Trump administration’s support of tax relief and removing regulatory barriers, unemployment is down, wages are up, the stock market is roaring, and hard-working Americans can keep more of their income.
Trade is also critical to that success. It supports millions of jobs and has dramatically advanced Americans’ quality of life and standard of living.
Tariffs, by contrast, make us poorer. They are a tax on consumers, businesses, and workers. Tariffs inflict the most harm on those who can least afford it. They also threaten the tremendous economic gains this administration has fostered.
But there is another, subtler way that tariffs hurt Americans — while putting Washington in the driver’s seat to micromanage the U.S. economy. Here’s an example of how it works.
On August 7 the Trump administration announced a 25 percent tariff on $16 billion in Chinese imports. (Predictably, China responded swiftly with an identical duty on the same volume of U.S. exports.) Soon the administration will announce the process by which the public can petition for exemptions from these new tariffs.
This will trigger a flood of applications from U.S. companies demanding a carve-out. Any company with a stake in the outcome — say, domestic steel producers that support tariffs on overseas competition — can file objections to protect market share.
Career employees at the Department of Commerce generally have no industry expertise to balance the arguments, yet they must judge the petitions as if they did. Already, more than 20,000 exemption requests have been filed with the government. They have overwhelmed the feds, who are falling short of their initial goal of a 90-day response.
More to the point, this whole process amounts to an open invitation to businesses everywhere: Send money to Washington to hire lobbyists and politicize the market to grow your profits. As the Washington Post editorialized, “that’s what central planning does.” The Wall Street Journal aptly put it this way: “Far from draining the swamp, tariffs feed the swamp.”
This is crony capitalism and corporate welfare at their worst.
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