Tariffs Are Evil, Not Just Bad Economics

Even if their proponents were right about their effects, they'd be obviously immoral

Tariffs are bad economics. Anyone acquainted with econ 101 knows that. In fact, as Brian Albrecht argues, the econ 101 story about tariffs likely underestimates how bad they are. Because tariffed goods often aren’t finished products, the real economic devastation is worse than econ 101 assumes.

But one oft neglected fact about tariffs is that even if their proponents were correct about their effects, they’d obviously be horrendously immoral. Even if tariffs boosted American manufacturing and benefitted the economy—something that anyone familiar with recent stock market fluctuations knows they don’t do—we still shouldn’t enact them.

Imagine that we could directly tax people in other countries. We could take their money and, say, use it to fund American manufacturing. This tax would benefit Americans. American spending power would go up. It would also create various good-paying manufacturing jobs.

Nonetheless, such a policy would be deeply despicable. We’re the richest country in world history! Taxing poor people in Vietnam to subsidize Americans would be a bit like Elon Musk stealing from homeless people. Vietnam—one of the countries Trump’s recent tariffs affected most substantially—has a GDP per capita of about 4,200 dollars. That means the average person in Vietnam has a third the income of an American at the poverty line.

Proponents of tariffs claim they amount to a tax on other countries. Because these countries are allegedly ripping us off in trade, by taxing trade, we can make money and protect American jobs. But you don’t have to be a brilliant philosopher to know that it’s immoral to tax people making ten dollars a day to subsidize people who are richer by an order of magnitude.

When one takes into account the second-order effects, things get even worse. By taxing Vietnam, those who support tariffs hope that this will shift manufacturing jobs from there to here. But shutting down industry in a desperately poor country, where the alternative jobs are considerably worse, to artificially prop up a failing industry in a country that’s far richer is immoral. The poor shouldn’t pay taxes to the rich. The people of Vietnam experience poverty of a sort that average Americans could not fathom. Taking their money to give it to people making 50,000 dollars a year is grotesque.

Imagine trying to justify this policy to the Vietnamese. “Even though people in our country earn, on average, more than 26 times as much as people in yours, because industries have left our country—leaving the only jobs being ones that pay only 15 times as much as you earn, rather than 26 times as much—we demand your money.” This would be deeply evil.

International trade is among the most efficient engines for prosperity in world history. As Garett Jones notes in the part of The Culture Transplant where he was saying true things, one paper found, after running 4 million regressions, that the number of years a country has had free trade for is one of the most robust predictors of prosperity. It’s one of the big reasons why the share of the Chinese population in poverty has looked like this:

In light of this, restricting trade inflows to some of the poorest countries on Earth is deeply evil. And notably, Vietnam isn’t the poorest country we’ve tariffed—not by a long shot. Vietnam is a particularly grotesque example because we’re responsible for their poverty, but we’ve tariffed many countries that are far poorer.

We have tariffs on Burundi, which has a GDP per capita of around $157. We have an across-the-board tariff, so this targets many desperately poor countries—South Sudan, Yemen, Malawi. Many of these countries citizens earn, on average, less than $2 a day.

Taxing people earning $2 per day to pay for American manufacturing is hideously evil. The fact that this is treated as an obvious good in American discourse shows how morally idiotic we are as a nation.

The situation is particularly tragic when one takes into account that tariffs are bad for us. Tariffs inefficiently distort an economy, causing grievous harms to both the country imposing tariffs and the country that’s the victim of tariffs. Thus, the Trump tariffs would be like if America stole money from the citizens of South Sudan, and then spent the money so recklessly that it made Americans worse off. You shouldn’t do evil things, but it’s particularly horrifying that we’re engaged in grave evil for the sake of enacting policies that aren’t even in our interest.

America should not prop up failing industries by stealing from starving people who earn $2 per day. Tariffs aren’t just bad economics, they are a deep moral stain on the soul of our nation. They’re probably one of the worst things we do as a nation.