I recall the tariffs on Chinese products that Trump enacted as being pilloried on the old board. Biden hasn't rescinded them and has added more. I just listened to a segment on NPR that mentioned Biden's tariff on Canadian lumber products as a factor in supply chain/ expense issues in the housing shortage. As an aside, the experts didn't seem too keen on the proposed $25k in assistance for first time buyers either.
Regarding tariffs, what say ye?
There's a lot here to address.
1. Not all "tariffs" are the same. Let's start with the most basic type of tariff: the protectionist duty. These are the types of tariffs that countries impose to insulate industries from foreign competition. Lowering and/or removing these tariffs has been the goal of international trade law and policy for decades. Tariff schedules between nations are negotiated in massive "rounds" that take years to complete. The most recent round, the Doha talks, didn't accomplish as much as people hoped and to my knowledge, there have been no further multi-lateral negotiations.
This type of tariff is almost universally regarded as bad. The evidence that tariffs make countries poorer is overwhelming (and see below). In trade law, tariffs are one of the policies that we call "beggar-thy-neighbor," meaning that they are policies designed to make trading partners poorer. Well, one problem with that is that trading partners aren't too keen on being exploited, so they put their own beggar thy neighbor policies on us. It's lose-lose. If you want a vivid example, look at Latin America in the 60s and 70s. Those countries tried to use beggar-they-neighbor tariffs to substitute imports with domestic production. Most of them went broke not long thereafter.
This is, of course, the type of tariff Trump is talking about imposing.
Plus, conservative economists have long argued that even unilateral tariffs are harmful -- that is, the economic distortions that come from tariffs hurt the US economy even in the absence of any retaliatory tariffs. I've never been convinced by that. I can't say that it's wrong; I think the evidence is inconclusive because there's not that much data on this point. Anyway, if you believed conservative economists about tax policy . . .
2. There's another type of "tariff" that isn't, strictly speaking, a tariff at all but which works similarly enough that it falls within the casual meaning of that term. [Technically, "tariffs" are scheduled at the WTO; if it's not scheduled, it's not a tariff]. These are the so-called anti-dumping and countervailing duties. The purpose of these charges is to protect domestic companies not from competition, but from specific types of ***unfair*** competition -- namely, dumping and/or subsidies. So if a country tries to sell stuff below cost here, in the hopes of displacing the domestic producers, the government can impose a duty to make its effective price at least at cost. This type of duty is relatively uncontroversial. It's even written specifically into GATT.
Now, note that the existence of this category of duty is evidence that tariffs do in fact raise consumer prices. It would make no sense otherwise. It wouldn't protect domestic industry from dumping unless tariffs raise prices for goods.
Countervailing duties are a sibling of anti-dumping duties. Anti-dumping duties target sales below cost; countervailing duties target unfair subsidies that lower foreign producers' costs so that they technically aren't dumping. Countervailing duties are more controversial for several reasons, that we don't need to get into unless someone asks. It gets a bit technical.
So the tariffs that Biden is imposing on China are, to the best of my knowledge, anti-dumping and countervailing duties. That's not the same as an across-the-board tariff. It's also China specific (in addition to product specific) and thus different from Trump's ideas on that axis as well. Now, countervailing duties can be used as cover for protectionist tariffs (one reason they are controversial), and Biden might be doing some of that for political reasons. But they aren't the same thing.
3. Finally, there's a strategic tariff. The strategic tariff has the same function as the protectionist tariff, except that it applies only to infant industries of special importance to a home country. For instance, Europe used to put tariffs on airplanes and airplane parts to nurture Airbus, since otherwise continental Europe had no major airplane manufacturer and Europe wanted one. In the 1980s, lots of countries tried to nurture auto industries with strategic tariffs. They have mostly been rescinded, because strategic tariffs . . . well, they don't necessarily work, and even when they do, the results aren't necessarily great.
Sometimes these "infant industry" protections are marketed as countervailing or anti-dumping duties, but that's not necessarily an accurate characterization. I read articles about how the Obama solar panel tariffs were really infant-industry protection and that they weren't justified as anti-dumping or countervailing. But anyway, any duties imposed as part of the Inflation Reduction Act or the CHIPs Act (I don't remember if there were any) would be strategic in nature.
The jury is out on strategic tariffs. The economist who first wrote extensively about them was Paul Krugman, and it was this work that was mainly responsible for his Nobel. Some people think that they do tend to benefit infant industries, and thus ultimately lead to more competition and lower prices in the long run. I don't buy that completely. It certainly works in some cases (e.g. Airbus), but as I mentioned, there are a lot of examples of it failing. Ever heard of Maruti cars? Yeah. They were designated the "official car" of India and tariffs were put in to protect the industry. Too bad the cards sucked. The company was sold to Suzuki. Maybe they make good cars now, but they aren't Indian anymore so the strategic tariff failed.
Does this help?
