The Case Against Tariffs Is Getting Stronger
Economists have long understood that higher levies on imports do not reduce a nation’s trade deficit, and there is evidence they may actually increase it.
Vulnerable to tariffs.
Photographer: David Ryder/Bloomberg
Among President Donald Trump’s most frequently expressed views are that trade deficits are bad and tariffs are good. Given his recent actions and pronouncements, he also seems to believe that higher tariffs will lower the US trade deficit, as Americans businesses and consumers buy less from abroad.
Unfortunately, the truth here is bad news for Trump: Economists have long understood that higher tariffs do not, in general, reduce trade deficits. In fact, global data show that countries with higher tariffs actually have higher trade deficits.