More than 1,100 economists sign open letter to Trump, Congress voicing opposition to tariffs and protectionism

From Mark Perry.

"Today’s press release from the National Taxpayers Union (NTU):

The lowering of trade barriers between nations has been one of the great achievements of the global economic system in the postwar era. Trade agreements have enriched economies around the world and allowed people access to goods that would have been unimaginable in a harsh climate of economic protectionism. The current political moment has seen new trade barriers erected as well as additional threats to rescind trade agreements and play politics with trade conventions that have benefited everyone. National Taxpayers Union is joined by more than 1,100 economists urging opposition to this new economic protectionism in the following letter.

The letter (see full text below) was released today at 10 a.m. at a press conference at the National Press Club and featured comments from signers including:

• Susan A. Aaronson, Research Professor of International Affairs and Cross-Disciplinary Fellow at the George Washington University’s Elliott School of International Affairs and Senior Fellow at the think tank Center for International Governance Innovation.
• Sherman Robinson, nonresident senior fellow at the Peterson Institute for International Economics.
• Robert Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy for the National Association of Home Builders.
• Mary Lovely, Professor of Economics and Melvin A. Eggers Faculty Scholar at Syracuse University’s Maxwell School of Citizenship and Public Affairs.
• Douglas Holtz-Eakin, president of the American Action Forum.

Signers of the letter include economists from each of the 50 states, 15 Nobel laureates (Alvin Roth, Richard Thaler, Oliver Hart, Roger Myerson, Robert Merton, James Heckman, George Akerlof, Robert Lucas, Robert Shiller, Vernon Smith, Robert Engle, Eric Maskin, Eugene Fama, Robert Solow, Edmund Phelps), and advisors to presidents Reagan, Bush, Clinton, Bush II, and Obama. NTU will keep the option to sign the letter open so that additional economists can have their names added to the list. Current list of signatories available here.

Open Letter to President Trump and Congress:

In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act (Willis C. Hawley and Reed Smoot are pictured above in April 1929, shortly before the Smoot–Hawley Tariff Act passed the House of Representatives). Today, Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers.

Congress did not take economists’ advice in 1930, and Americans across the country paid the price. The undersigned economists and teachers of economics strongly urge you not to repeat that mistake. Much has changed since 1930 — for example, trade is now significantly more important to our economy — but the fundamental economic principles as explained at the time have not: [note — the following text is taken from the 1930 letter]

We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. A higher level of protection would raise the cost of living and injure the great majority of our citizens.
Few people could hope to gain from such a change. Construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose, since they produce no products which could be protected by tariff barriers.
The vast majority of farmers, also, would lose through increased duties, and in a double fashion. First, as consumers they would have to pay still higher prices for the products, made of textiles, chemicals, iron, and steel, which they buy. Second, as producers, their ability to sell their products would be further restricted by barriers placed in the way of foreigners who wished to sell goods to us.
Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them. Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods.
Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. A tariff war does not furnish good soil for the growth of world peace.

Here are related reports from Bloomberg (“Economists Invoke Great Depression in Warning to Trump on Trade“) and Reason (“Hey Trump! The 1930s Called, They Want Their Trade Policy Back“)"