Tariffs and Trade Wars Won't Stimulate American Manufacturing

tariff concept

Late last year Congress passed the “Tax Reform and Job Creation Act of 2017”, which saved the year from being a total bust with regard to conservative legislation.


The combination of President Trump’s roll-back of the regulatory state, coupled with Congress passing the largest tax reform package since the 1980s, sent the economy soaring. For more than two consecutive quarters, the U.S. economy topped 3% GPD growth, a level not seen since the middle of George W. Bush’s second term.

This boosted consumer confidence, consumer spending, and prompted businesses to expand operations and hire new employees. On the economic front, America really did become great again.

All of this renewed prosperity, however, could be threatened if America were to enter into a trade war prompted by proposed Tariffs on steel and aluminum. I am a big believer in American manufacturing. Having worked in the financial services industry for years, I have worked with manufacturing operations that served as tier I suppliers for large corporations like GE, BMW, and Boeing. These skilled manufacturers have helped America recover its edge when it comes to building things.

Durable, high-priced goods are our new specialty. These operations, which have endured the disaster of Obamacare, the nightmare of Obama-era regulatory overreach, and Dodd-Frank cutting off their access to banking services, are finally seeing light at the end of the tunnel. If our nation now engages in tariffs and a trade war, however, that light may turn out to be a train.


I understand President Trump’s honorable desire to protect American workers. It is the job of the American President and the American Congress to put America and Americans first.

There is no doubt that nations like China have cheated, and that they have hurt certain segments of our economy through currency manipulation and unfair trade practices. It is true that these nations have subsidized exports to America, and punished imports from America to their countries. Dealing with these bad actors individually, however, is the better solution versus smacking tariffs on categories of goods like steel and aluminum. In the end, tariffs will adversely impact American manufacturing and American consumers, because foreign factories will impute into their prices the cost of the tariff, while maintaining a slight price edge over American producers.

This will mean that American consumers and manufacturers will feel the pinch from U.S. tariffs, not foreign steel and aluminum manufacturers overseas.

I support President Trump’s desire to revive the American economy, protect our workers, and rebuild our manufacturing base. The best way to do this, however, is through even further tax and regulatory reform, not through tariffs. By continuing to lower U.S. corporate and individual income taxes, or pursuing an outright elimination of them through the Fair Tax, we can further lower American manufacturing costs and gain a greater competitive advantage. By further reducing the regulatory state, and eliminating job-killing regulations, we can further free the entrepreneurial spirit in our nation and incentivize the growth of skilled manufacturing jobs in America.


If we try tariffs as a way to grow the American economy, I fear that it will fail. If the European Union, Australia, Canada and / or Mexico stopped importing, or significantly taxed the import, of American farm goods, Harley Davidsons, airplanes, computers, etc, we would lose more jobs than we gain through the imposition of tariffs.

We must rebuild American manufacturing through internal tax and regulatory reform, and deal with bad trade actors like China directly, instead of imposing tariffs that would broadly affect America’s economy and international trade partnerships. Freedom and free-markets will protect American workers and our economy far more than protectionism.


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