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Tuesday, May 8, 2018

Economists urge Trump to reject protectionism

National Taxpayers Union - More Than 1,100 Economists Join NTU to Voice Opposition to Tariffs, Protectionism:

May 3, 2018 - "The current political moment has seen new trade barriers erected as well as additional threats to rescind trade agreements and play politics with trade conventions that have benefited everyone. National Taxpayers Union is joined by more than 1,100 economists urging opposition to this new economic protectionism in the following letter.

May 3, 2018
Open Letter to President Trump and Congress:

"In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act. Today, Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers.

"Congress did not take economists’ advice in 1930, and Americans across the country paid the price. The undersigned economists and teachers of economics strongly urge you not to repeat that mistake..... [note -- the following text is taken from the 1930 letter]

"We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay.... Construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose.... The vast majority of farmers, also, would lose....

"Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them. Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods.

"Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. A tariff war does not furnish good soil for the growth of world peace."

Read more: https://www.ntu.org/governmentbytes/page/economists-join-ntu-to-voice-opposition-to-tariffs-protectionism
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