How to Think About the Trade War
The question isn't whether Trump's tariffs are hurting the U.S. economy--they definitely are. They're hurting the U.S. economy, and they're hurting China's economy. And the question isn't who is paying the tariffs--Americans are paying U.S. tariffs on Chinese goods, and the Chinese are paying China's retaliatory tariffs. That's how tariffs work. They directly harm the country assessing the tariffs in order to indirectly harm the targeted country.
The real questions are as follows: 1) is the damage of the trade war worth it? Is the short-term harm worth some greater long-term good? Some critical geopolitical strategy?
And 2) are tariffs the best way to accomplish the possible long-term good asserted?
A Long History: IPI's Work on Drug Importation Risks
For over 16 years, the Institute for Policy Innovation has released numerous publications warning the risks of such a scheme cannot be overstated—foremost the public health danger, since it is impossible for the U.S. to guarantee the safety of imported drugs.
The following is a history of IPI’s research into the question of whether the U.S. should open its drug market to imported pharmaceuticals.
Drug Importation Opens Doors to Counterfeit, Compromised Drugs
Health and Human Services Secretary Alex Azar announced the Trump administration will reverse a decades-long policy and create a way for Americans to import prescription drugs from Canada.
Azar says that by moving forward on reimportation, the administration is putting Americans patients first. But IPI experts agree that the practice has been illegal chiefly because it puts Americans in harm’s way. Importantly, drug manufacturers cannot guarantee the safety of prescription drugs reimported to the United States.
Tariffs Aren't the Only Tool
It's pretty clear by now that the Trump administration's favorite way to put pressure on another country to accomplish some political goal is to threaten and impose tariffs.
In fact, tariffs have become an all-purpose foreign policy tool for the Trump administration. China's theft of IP and unfair business practices? Tariffs. China's supposed currency manipulation? Tariffs. China's trade surplus with the United States? Tariffs.
The US steel industry not doing great? Tariffs.
And now, trying to get Mexico to do more to stem the flow of migrants into the US? Well, tariffs, of course.
Now, the common retort to criticism of tariffs is something along the lines of "Well, at least he's doing something!" Or, "Don't you think we should do something about China's IP theft\China's currency manipulation\hordes of illegal immigrants from Mexico?"
Well, yes, actually. I DO think the president should be addressing all of those things, and I'm glad he is. I just don't think tariffs are the only or the best tool to accomplish those purposes. There are other tools in the quiver besides tariffs.
President Reagan on Trade & Tariffs
President Reagan's 1988 radio address on free trade, delivered soon after the U.S.-Canada Free Trade Agreement was signed, remains timely.
My fellow Americans:
This week, as we prepared for Thanksgiving, Canada held an important election, and I'm pleased to again send my congratulations to Prime Minister Mulroney. One of the important issues in the Canadian election was trade. And like our own citizens earlier this month, our neighbors have sent a strong message, rejecting protectionism and reaffirming that more trade, not less, is the wave of the future.
Here in America, as we reflect on the many things we have to be grateful for, we should take a moment to recognize that one of the key factors behind our nation's great prosperity is the open trade policy that allows the American people to freely exchange goods and services with free people around the world. The freedom to trade is not a new issue for America. In 1776 our Founding Fathers signed the Declaration of Independence, charging the British with a number of offenses, among them, and I quote, "cutting off our trade with all parts of the world," end quote.
Matthews on CGTN TV: Slim Odds for a "Quick" US-UK Trade Deal
On Tuesday, IPI resident scholar Dr. Merrill Matthews joined CGTN-TV’s “The Heat” host Anand Naidoo to discuss President Donald Trump’s state visit to the United Kingdom and what it means for future trade relations between the two powers.
Despite the president’s optimistic statements at the St. James’s Palace joint press conference with Prime Minister Theresa May, Matthews voiced skepticism of the U.S. making a “quick deal” on trade post-Brexit.
Trump's Stock Market Fears Fuel U.S.-China Trade Talk Progress
After meeting with U.S. officials in Beijing this week, China is in turn expected to send delegates to Washington for continued trade talks.
IPI’s Dr. Merrill Matthews joined a panel on CGTN’s The Heat to discuss whether these meetings are laying hopes for a resolution on trade.
U.S. Consumers Continue to Lose in Escalating China Trade War
Amid rising tensions in U.S.-China trade, IPI resident scholar Dr. Merrill Matthews joined CGTN America’s The Heat where he noted that China’s retaliatory tariffs are indeed highly targeted toward likely supporters of President Trump, while the U.S.-imposed tariffs are hammering all American consumers and the opposite of “draining the swamp.”
U.S. Sanctions Against China May Increase Trade Deficit
In his latest interview with CGTN-America TV’s The Heat, IPI’s Dr. Merrill Matthews addressed tensions between the U.S. and Iran, as well as U.S.-China trade relations. Click here to watch the full discussion.
Imposing Tariffs on All Chinese Imports Could Lead to Chaos
President Donald Trump said that he’s prepared to impose tariffs on all Chinese imports to the U.S., amounting to $500 billion worth of goods. In a panel on CGTN America, IPI’s Dr. Merrill Matthews conceded that such a move could lead to chaos.