Mises Wire

An Open Letter to President Trump on Trade and Tariffs

Dear Mr. President:

With your July 10 announcement of $200 billion in new tariffs on Chinese goods, doubling down on tariff increases announced earlier, it is clear you seek an aggressive trade war. This is unacceptable treatment for a country with which the United States has increasingly improved relations over a period of almost five decades prior to 2018.

These trade restrictions will damage China, but also average Americans. A common tactic of war is to cut off supplies to enemies. Your tariffs will cut off supplies, or raise prices, for American consumers — effectively treating them as enemies.

Tariffs are taxes. Most of your proposed tariffs will feed though the supply chain and in time hit poorer Americans hardest. Why attack the most vulnerable in our society, who benefit enormously from inexpensive imported retail goods?

You point to “unfair trade practices” as you define them. Yet, the very essence of a free society is voluntary trade. That means that I can do business with my neighbor, or not. If my neighbor does not want to transact with me, despite the goods and services and terms I offer, then he does not have to do so. This feature of the economic environment is essential both within the United States and internationally.

American firms go to China to do business, to export goods and services from the United States, and to buy goods and services for importing into the United States. China imposes conditions you regard as unfair. No one forces Americans to do business in China or anywhere else. If a business or industry does not like China’s terms, it should seek other markets. But it should not and must not use the power of U.S. law to force China to do business as we might prefer.

The issue is not one of whether China’s conditions are or are not “fair,” but of whether the United States should use coercion — taxes on imports — against its own citizens to force a solution to its liking.

We urge you to return the U.S. tariff schedule to the one in force at the beginning of 2018.

To the Congress :

President Trump is using authority provided by Congress in trade legislation enacted over the years. Congress is responsible for the current state of affairs because you have delegated excessive authority over trade to the executive branch—authority properly residing with the legislature under the Constitution. You have within your power a simple way to end this trade war: pass legislation setting the U.S. tariff schedule at its level as of January 1, 2018. The President would no doubt veto the bill. You can override the veto.

Please accept your responsibility to stop President Trump from continuing on this destructive course. If you do not, future generations will look back and ask: why did Congress not act?

Sincerely Yours,

William Poole

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