Trump’s Tariffs Have McKinley Turning in His Grave

The 25th president used reciprocity to press for an expansion of trade. The 47th is going backward

By Phil Gramm and Donald J. Boudreaux. Excerpts:

"Reciprocal trade policy as envisioned by President William McKinley, whom Mr. Trump often cites as his role model, recognized that by the dawn of the 20th century America had emerged as an economic colossus capable of producing an abundance of products that could be profitably exported. As McKinley explained, “the expansion of our trade and commerce is the pressing problem. Commercial wars are unprofitable.”"

"McKinley’s reciprocal trade policy was aimed at opening markets for U.S. products with agreements that lowered tariffs on imported products proportionately as other countries lowered theirs on U.S. products."

"nowhere does he propose real reciprocity. He could eliminate the 25% U.S. tariff on imported trucks as an inducement to other countries to eliminate their tariffs on U.S. automobiles. Mr. Trump denounces high tariffs on U.S. exports to Central and South America and would use his theory of reciprocity as an excuse to raise U.S. tariffs on imports from those countries. But real reciprocity would be achieved by eliminating the quota on U.S. imports of sugar, for which Americans pay twice the world price, in return for Central and South American countries lowering their tariffs against U.S. products."

"The trade wars that wrought havoc in the 20th century occurred because of America’s efforts to protect agriculture from foreign competition in the 1920s and ’30s"

"Congress rushed to pass the 1922 Fordney-McCumber tariff to protect American agriculture"

"Herbert Hoover, running for president in 1928, promised to support additional farm tariff protection. Efforts to provide that protection ultimately produced the Smoot-Hawley Tariff Act of 1930 as industry piggybacked on the support for farm tariffs to pile on industrial tariffs as well."

"the 1922 tariff made it virtually impossible for Germany to pay its war debts"

"this protectionism denied a world market to U.S. manufacturing, where employment and wages were rising." 

"Wages in manufacturing are lower on average than wages in the service industries. Technology has continued to expand America’s industrial capacity while employment in manufacturing as a share of total nonfarm employment has fallen by 75% since 1946."

"under the protectionist policies of the first Trump administration the trade deficit rose, employment in manufacturing as a percentage of total employment continued to decline, and economic growth, which reached a 13 year high in 2018 under Mr. Trump’s deregulatory and tax-cut policies, slumped under his tariffs."