Medved: Trade War Means Hidden Tax Hikes

Both Democrat Hillary Clinton and Republican Donald Trump have broken with the 70-year consensus on free trade, with Trump threatening a 45 percent tariff on imports from China, Mexico, and other countries on his enemies list. The problem is that tariffs don’t really tax foreign countries and companies; it’s a tax on American consumers, who must either pay more for imported products they want, or pay more for American-made items they don’t really want.

In terms of creating jobs, far more workers in the U.S. make items for export than the meagre number of new positions possibly gained by restricting imports; economists agree a trade war would cost jobs rather than creating them.

With today’s global economy and enhanced transportation of goods, the promise of new protective tariffs—a punishing tax hike on American consumers—illustrates the wisdom of H.L. Mencken’s statement that “for every complex problem there is an answer that is clear, simple … and wrong.”