Kimberly Clausing
116 μ¢¤³£ ¬μμ¬
o their income and because a higher share o their spending goes to
heavily taried products, such as food and clothing. That is one reason
why progressives in the early twentieth century, outraged by the
inequality o the Gilded Age, pushed for moving away from taris
and toward a federal income tax: it was widely recognized that taris
largely spared the rich at the expense o the poor. Now, the reverse is
happening. After having championed tax cuts that disproportionately
beneÄted well-o Americans, the administration has tried to collect
more revenue from regressive taxes on trade.
Second, taris and trade wars wreak havoc in U.S. labor markets by
raising costs for American companies. Many large U.S. manufacturers
are heavily dependent on imports. Boeing is a top U.S. exporter, but it
is also a major importer, relying on crucial parts from around the world.
General Motors now pays over $1 billion in annual taris, no doubt one
factor behind the company’s recent decision to shutter a plant in Ohio.
When taris interrupt global supply chains, they disadvantage U.S.
companies relative to foreign ones. I the goal is to make the United
States a more internationally competitive place to locate jobs and direct
investment, protectionism is a completely backward approach.
Third, trading partners do not sit on their hands when Washington
raises taris on their products. Already, the Chinese, the Indians, and
the Europeans have slapped serious retaliatory taris on U.S. goods.
The victims o these measures include soybean farmers in Iowa and
Minnesota (who have lost market share to Canada as Chinese buyers
look elsewhere) and whiskey distillers in Kentucky and Tennessee
(who have seen their exports to Europe and elsewhere plummet).
Finally, trade wars harm the global economy and U.S. trading
partners, weakening Washington’s network o alliances and jeopar-
dizing the cooperation required to deal with pressing international
problems. Recent meetings o the G-7 and the G-20 have been dom-
inated by discussions aimed at diusing trade conÁicts, distracting
precious diplomatic attention from climate change and nuclear non-
proliferation. It is easy to take peace and international cooperation
for granted, but they are prerequisites for the success o the U.S.
economy in the decades ahead. The world is witnessing another rise
in economic nationalism, which makes it easy for politicians and
publics to embrace nationalist tendencies in other spheres. It is worth
remembering that after the last era o globalization came to a halt,
what followed was the Great Depression and World War II.