Tariff man doubles down on his passion

US President Donald Trump has long been a staunch advocate of import tariffs, proudly calling himself “Tariff Man” and asserting that tariff is “the most beautiful word in the dictionary.”

- ANNE O KRUEGER

Defenders of Mr Trump’s trade policies argue that his tariff threats are merely a negotiating tactic and will ultimately benefit the US economy. But the latest move — including his plan to impose “reciprocal” tariffs, matching those imposed by other countries on US goods — suggest that, unlike in his first term, he is fully committed to this protectionist trade agenda.

Mr Trump’s ultimate goal, however, remains unclear. He seems to have embraced the deeply misguided idea that imports are inherently harmful.

From a global perspective, tariffs mostly do more harm than good. The reality is that tariffs raise costs and lower the quality of domestic production, undermining the very economies they are meant to protect.

Consider, for example, shipbuilding. Constructing an average-size ocean-going ship costs US$55 million more in the US than in Japan or South Korea. A ship that costs US$333 million to build in China would cost $333 million in the US. While some may justify these cost differences in name of security, genuine ones must wonder: Shouldn’t the US Navy be far stronger if it could acquire four times as many ships by purchasing them abroad?