One year ago last Thursday, Donald Trump stood up for rugged individualism in markets by imposing import taxes on Americans. He called his edict a “liberation,” as if Americans were oppressed by importation of goods they desired to buy. His hope was that domestic American production would respond with more output, more employment to make the American economy the “hottest” ever in the history of humanity.
Some hopes are false.
Two hundred and fifty years ago, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. This was not a book about hope, but rather one of practical observations about the ways of the world.
As you know, the Caux Round Table has just published, with De Gruyter Brill, a book with chapters placing Adam Smith in a modern context, integrating his book on free market economics with his previous book on moral sentiments.
In Wealth of Nations, Smith observed the negative externalities that accompany tariffs.
In a recent commentary in the Wall Street Journal, two experienced economists looked at the data and like Adam Smith, observed negative externalities following on President Trumps imposition of tariffs on Americans.
Their commentary is here.