The protectionism vs. free trade debate drew national attention this summer with three rounds of import tariffs the president enacted via executive order. The president justified the tariffs by accusing China of “cheating” on trade—manipulating the value of its currency lower relative to the US dollar, which makes Chinese imports cheaper and undermines American producers. (A Forbes article from January 2017 reports that China is actually doing the opposite: they are manipulating the yuan up, not down, which actually makes Chinese imports to the US less competitive.)
The consensus among economists is universal: tariffs are a terrible idea. In March, a research center at the University of Chicago polled 53 economics professors regarding the president’s proposed tariffs on steel and aluminum imports. Not one of the experts surveyed was in favor of the tariffs. When you levy an import tariff, it provides lucrative profits for a small fraction of producers (those who compete directly with the imported product) at the expense of consumers and the majority of producers.
Unfortunately, the exhortations of the 53 professors did not dissuade the president from signing a 25% tariff on all steel imports and a 10% tariff on aluminum. These measures, which took effect on June 1, comprised the first round of the so-called “Trump tariffs.”
The stated goal of the tariffs was to support American manufacturing companies. There’s just one problem. Steel and aluminum are intermediate goods. In other words, they aren’t commonly available on the market for consumers to buy—rather, they are used by American manufacturers to produce final goods, like cars. If the prices of their input materials rise, every one of those producers is going to suffer. That’s why tariffs are never levied on intermediate goods, only final ones. Until now, that is. One has to wonder how many hours the president’s economic advisers spent in economics class.

As for all the rhetoric about China cheating on trade, the steel and aluminum tariffs struck American allies far harder. The law applies not just to China, but also to Canada, the European Union, and Mexico.
An article published in the Washington Post in May shows the breakdown of total US steel and aluminum imports from last year:
Canada – $12.4 billion
European Union – $7.7 billion
Mexico – $2.9 billion
China – $2.9 billion
The math is simple: almost 90% of US steel and aluminum imports come from our allies. And those allies are not happy. Within a month of the June 1 tariffs, all three of them struck back with retaliatory tariffs on US goods.
I wish I could report that the foolishness ended there. But that was only the first round of tariffs. The second round, which took effect on June 15, consisted of a 25% tariff on $34 billion of Chinese goods, with the possibility of another $16 billion after further review. (That would bring the total to $50 billion.) Like our allies, China immediately responded in kind. They enacted matching tariffs on $34 billion of US goods, with a possible addition of $16 billion at a later date.
The third round of tariffs, however, dwarfed the first two by sheer scale. On September 17, the administration announced tariffs on $200 billion of Chinese imports. By the end of this year, American consumers will be paying an extra 25% on almost half of all consumer goods imported from China, from toiletries to tires. China retaliated with tariffs on $60 billion of US goods, to which the president responded by threatening to expand his tariffs to all Chinese imports, period.
This escalating situation of tariffs and counter-tariffs is called a trade war—and the fact that it has erupted not only with China, but also with our allies, is unheard of. Moreover, Congress has not split along party lines over the tariffs, as is often the case with more trifling issues. The mainstream GOP, in a refreshing show of principle, has not fallen in behind the president. Conservatives tend to be the staunchest supporters of free trade; thus the Trump tariffs are fundamentally a betrayal of conservative principles. Republican leaders, including Paul Ryan, Mitch McConnell, and Orrin Hatch, have been the most vocal critics of the tariffs, though the opposition has been forceful from both sides of the aisle.
Let me leave you with this thought, tweeted from the president’s personal Twitter handle on March 2:
“trade wars are good, and easy to win.”
That is what we’re up against.