If there was ever a time to start my MEGA campaign, now is the time to Make Economics Great Again: From MAGA to MEGA: With YOUR Help, It Can Be Done! - Mark Skousen
“No nation was ever ruined by trade.” – Benjamin Franklin
I’ve never witnessed more misinformation about foreign trade and globalization than I have during Trump’s second term.
I’ve warned repeatedly that President Donald Trump is an old-fashioned protectionist, much like Senators Reed Smoot and Willis Hawley, who pushed through the infamous Smoot-Hawley Tariff of 1930, which worsened the Great Depression.
To call Trump’s unconstitutional executive order imposing a 10% across-the-board tax a “Liberation Day” is pure 1984-style Newspeak. I doubt if anyone will be "liberated" by it. Even domestic producers of cars, steel, and other products will face higher costs, as much of the input for American cars, steel, and other goods comes from across the border.
Fox News’ Jesse Watters, who acts as the waterboy for the President, claimed that “Liberation Day” represents a “declaration of economic independence.” Interestingly, in 1776, Adam Smith published The Wealth of Nations, which was the first true declaration of economic independence (written just before Thomas Jefferson penned the Declaration of Political Independence). In that book, the father of modern economics eloquently argued against protectionism and in favor of free trade. His book was truly liberating, not Trump’s massive tax increase.
And let’s be clear: Trump’s tariffs are nothing but tax increases, which will be paid for by American producers and consumers, not foreigners.
Jason Furman, Harvard economist and former chairman of the Council of Economic Advisors, rightly states, “Start with the fact that imports are good, not bad. They offer consumers greater variety, such as avocados from Mexico, lower prices on cars from South Korea or greater quality, including Champagne from France. American companies are able to offer better products at lower prices and be globally competitive because they use imported steel, auto parts and precision machinery. Moreover, importing these items frees us up to devote more of our production and employment to higher productivity and higher-wage jobs, including in export industries such as aerospace and software design.”
One major factor that seems to be missing in the trade war debate is that American cars will not escape the impact of higher tariffs. That's because US cars rely on complex global supply chains for the roughly 30,000 parts used in producing an automobile, and 40% of auto parts come from abroad!
The global supply chain plays a significant role in all US manufacturing.
Wall Street is sending a clear signal that the economy will suffer from this manufactured crisis. I call it Trump’s Disaster Plan: Raising Taxes! - Mark Skousen
Since Trump started imposing tariffs left and right, the stock market has already lost over $4 trillion. A recession and bear market are increasingly likely—all of which could have been avoided had the President understood basic economics and the law of comparative advantage, which is taught in colleges. (He must have slept through his economics classes at Wharton; Jeremy Siegel, a long-time professor there, has called Trump’s trade war “total insanity.”)
If there’s one area where the vast majority of economists agree on, it’s in support of free trade and globalization. If the President’s intention is to ultimately lower tariffs and other barriers to trade by all countries, I’m all for it. But so far it looks like we’re seeing the opposite.
Our Constitution is Under Attack
Yes, our democracy is at risk. We are living in dangerous times, when only one man — the President of the United States — is making major policy decisions without congressional or public approval. It’s un-American, and frankly, unconstitutional.
Article I, Section 8, of the Constitution assigns Congress, not the President, the power to impose tariffs, duties and quotas. The only exception is during a wartime emergency. Trump is faking it—trade is not a national emergency, especially with our allies.
The would-be King of America has actually toyed with the idea of replacing the income tax with import duties, as was the case in the beginning of our republic. Steve Forbes has a better idea: a simple flat income tax that can be filled out on a postcard. It’s tragic that the President is spending so much time and energy on his tax increases when he should be focusing on extending the tax cuts to American citizens.
SPECIAL ALERT: Trump’s trade war is so important that we are devoting our Global Economic Summit at this year’s FreedomFest to “The Tariffying Debate: What the Trade War Means to the Economy, Jobs and the Stock Market.” It will take place Thursday morning, June 12, at the Palm Springs Convention Center, California. Panelists will represent both sides of this issue.
One major factor that seems to be missing in the trade war debate is that American cars will not escape the impact of higher tariffs. That's because US cars rely on complex global supply chains for the roughly 30,000 parts used in producing an automobile, and 40% of auto parts come from abroad!
The global supply chain plays a significant role in all US manufacturing.
It's shocking the level of ignorance our political leaders have when it comes to foreign trade and globalization.
FreedomFest, "the world's largest gathering of free minds," will be June 11-14 at Palm Springs, California. For more information, go to www.freedomfest.com.
