Imposing tariffs on intermediate inputs is especially bad: Chad Brown: The element of surprise is a bad strategy for a trade war

It would seem that veryone serious except Peter Navarro, Robert Lighthizer, Larry Kudlow—and Donald Trump—knows that imposing tariffs on intermediate inputs is especially bad, especially destructive: Chad Brown: The Element of Surprise Is a Bad Strategy for a Trade War: “Trump’s decision to impose restrictions on intermediate inputs and capital equipment is a step backward…

…It goes against decades of government work to lower trade barriers so Americans have easy access to low-cost, high-quality components. This is a basic competitiveness strategy for any government that wants to encourage companies to invest locally and employ more American workers to create valuable products. Trump’s plan means American-based manufacturing and service providers will find it increasingly difficult to compete with Germany, the United Kingdom, Japan, South Korea, and throughout Asia—where tariffs on parts and equipment remain low. That would be bad enough.

Making matters worse is the administration’s “element of surprise.” That only amplifies the disruption to US businesses. President Trump may be using this tactic to avoid political pushback. But his sneak-attack tariffs are likely to turn out an unwelcome and startling disruption for the very same American businesses and workers he claims to be trying to help…

April 18, 2018


Brad DeLong
Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch