Biden's Tariffs Are a Bad Idea

Bad for consumers, bad for American industry, bad for his administration's own environmental goals, and bad for an increasingly irrational executive branch.

By Eric Boehm of Reason. Excerpts:

"Only about 1 percent of American E.V. imports come from China right now, but the high tariffs will effectively guarantee that Americans cannot purchase cars from some of the world's biggest E.V. manufacturers in the future.

It is a decision that reflects the muddled economic thinking that has defined Biden's time in office. It is a promise to raise taxes on Americans who want to purchase products the president disfavors, one that cuts directly against the same president's own environmental goals, all wrapped up inside silly election-year rhetoric."

""Tariffs on Chinese EVs won't just make Chinese EVs more expensive, they will also make American EVs more expensive," Ryan Young, a senior economist with the Competitive Enterprise Institute, said in a statement. "This is because domestic producers can now raise their prices without fear of being undercut by competitors. Good for them but bad for consumers—and for the Biden administration's policy goal of increased EV adoption."

Young pointed to the fact that domestic steel prices rose after Trump slapped tariffs on imported steel. Higher steel prices affected consumers in a variety of indirect ways, like by raising the price of cars and other products made from steel.

Erica York, a senior economist at the Tax Foundation, tells Reason that the new tariffs "will work no differently under President Biden than they did under former President Trump; they'll raise costs for consumers and businesses, and in this case, those higher costs will work in direct opposition to Biden's goal of greater EV adoption."

After the 2020 election, the incoming Biden administration's talk of a thorough review of Trump-era tariffs never amounted to much, and the White House has kept most of Trump's tariffs in place despite a lack of evidence that they are accomplishing anything other than raising prices for American businesses and consumers. Even though Biden has governed as a protectionist president, Tuesday's decision illustrates the extent to which cynical politics have triumphed over serious economics in Washington today—even after several years of higher-than-normal inflation have made Americans particularly aware of price hikes.

In that environment, adding more tariffs "is remarkably tone-deaf," says Bryan Riley, director of the free trade initiative at the National Taxpayers Union Foundation. "There is near-universal agreement that Section 301 tariffs failed to achieve their goals while costing U.S. taxpayers the equivalent of $1,700 per household and sparking Chinese retaliation against U.S. farmers and other exporters. It is asinine for the Biden administration to double down on this failed policy.""