<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div class=""><a href="http://americanphoenixpllc.com/the-tariff-merry-go-round" class="">http://americanphoenixpllc.com/the-tariff-merry-go-round</a> </div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><b style="font-size: 36px;" class="">The Tariff Merry-Go-Round</b></div><div class=""><br class=""></div><div class=""><span style="caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);" class="">Tariffs tariffs everywhere! We’re being flooded with tariff proposals. This post is about last week’s tariff merry-go-round with Canada and Mexico.</span></div><div class=""><br class=""></div><div class=""><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class=""><span style="background-color: rgb(255, 255, 255);" class="">A lot of the messaging criticizing the proposed tariffs has focused on</span><span style="background-color: rgb(255, 255, 255);" class=""> </span>price increases. This communications strategy is apparently meant to appeal to people’s concerns about inflation.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Let’s start with a basic point. Arbitrary, sudden tariffs are not good policy. Tariffs should incentivize, not destabilize. Tariffs should support workers, not billionaires.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Messaging tariffs as price hikes was the strategy in 2024 – and it didn’t work. According to a CBS poll, a majority of Americans wanted lower prices <em style="margin: 0px; padding: 0px;" class="">and</em> believed that tariffs would increase prices <em style="margin: 0px; padding: 0px;" class="">and</em> wanted tariffs.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">If people already believe that tariffs increase prices, but a majority supports tariffs anyway, then what are we accomplishing by telling people that tariffs increase prices?</p></div><div class=""><h3 class="has-text-color" style="margin: 0px 0px 10px; padding: 0px; clear: both; color: rgb(7, 0, 163); font-stretch: normal; font-size: 24px; line-height: 34px; font-family: "Roboto Condensed", Helvetica, Arial, Verdana, sans-serif;"><span style="margin: 0px; padding: 0px;" class="">Why are Establishment Democrats to the Right of Dwight Eisenhower?</span></h3><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">In fact, it’s not a given that tariffs increase prices. It depends on market structure. Sometimes companies absorb the tariffs. Sometimes they pass them on.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Market structure — and its effect on pricing power — similarly relates to inflation. There was a powerful argument that companies were taking advantage of pandemic supply shocks to jack up prices by more than the increase in costs. Price-gouging. Greedflation.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Economists stuck in the 1970s kept arguing that inflation was triggered by government spending, i.e., the pandemic stimulus. But that doesn’t explain why economies that <em style="margin: 0px; padding: 0px;" class="">didn’t </em>do stimulus — or didn’t do much — <em style="margin: 0px; padding: 0px;" class="">also</em> experienced inflation. Maybe it’s the supply shocks, stupid?</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Democratic economic intelligentsia <a rel="noreferrer noopener" href="https://freebeacon.com/latest-news/theres-no-upside-obama-economic-adviser-trashes-harriss-price-control-scheme/" target="_blank" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">attacked the greedflation/price-gouging argument</a> as though it were some outré position. Yet no less a figure than Republican President Dwight Eisenhower <a rel="noreferrer noopener" href="https://www.press.jhu.edu/books/title/10492/eisenhower-and-cold-war-economy?srsltid=AfmBOorG8bsNAb1JI8oD98G4dbGKSWCYdc2H5swUioAyM4uU8Fc-BThw" target="_blank" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">thought oligopolies stoked inflation – and supported a price-gouging law during the Korean War</a>. Take note: the free market fundamentalism of the past 40 years has moved the economic conversation so far to the right that establishment Democrats are to the <em style="margin: 0px; padding: 0px;" class="">right </em>of Eisenhower.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Is it too much to ask that <em style="margin: 0px; padding: 0px;" class="">Democrats</em> be to the <em style="margin: 0px; padding: 0px;" class="">left </em>of Eisenhower? </p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">FDR didn’t build a coalition of of working class people — and win four Presidential elections — by prioritizing the interests of the elites. And let’s remember that <a rel="noreferrer noopener" href="http://americanphoenixpllc.com/tariffs-and-taxes-democracy-and-oligarchy" target="_blank" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">what followed the New Deal was the Golden Age of Capitalism</a>. We don’t have to be in a zero-sum game between haves and have-nots. More for the have-nots is also good for the haves. </p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class=""><a href="https://www.foreignaffairs.com/united-states/real-purpose-trade-policy" target="_blank" rel="noreferrer noopener" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">And democracy.</a></p><h3 class="has-text-color" style="margin: 0px 0px 10px; padding: 0px; clear: both; color: rgb(7, 0, 163); font-stretch: normal; font-size: 24px; line-height: 34px; font-family: "Roboto Condensed", Helvetica, Arial, Verdana, sans-serif;"><span style="margin: 0px; padding: 0px;" class="">People See Themselves As Workers First, Consumers Second</span></h3><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">But since Americans accept that tariffs increase prices, let’s dig into why people who care about prices might nevertheless support tariffs.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">One answer? Tariffs are the opposite of free trade.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">We’ve been lectured (indoctrinated?) for decades that free trade is great for consumers. But a good chunk of the American voting population experienced free trade as the offshoring of their jobs and the hollowing out of their communities. Cheap goods didn’t make up the difference. So someone saying to them “I’m for tariffs, not free trade” is appealing to those folks on a <em style="margin: 0px; padding: 0px;" class="">visceral</em> level. People whose economic hardship has routinely been hand-waved away by right-of-Eisenhower economists hear “tariffs” — and feel <em style="margin: 0px; padding: 0px;" class="">heard</em>.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Now, if you were genuinely concerned for the people in those hollowed-out communities, then presumably you’d be really interested in <a href="https://www.usitc.gov/research_and_analysis/ongoing/distributional_effects_332" target="_blank" rel="noreferrer noopener" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">studies about the effects of our trade policies on those same people</a>. You wouldn’t, say, <a href="https://insidetrade.com/daily-news/ustr-withdraws-requests-itc-studies-trade-impacts-underserved" target="_blank" rel="noreferrer noopener" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">bump those studies off</a>. Because that would make it look like maybe you actually don’t care after all. Or that the studies might be a little too effective at tracking who’s actually benefiting from your trade policy.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">We need to stop fixating on people as consumers, and recognize that they’re also workers.</p></div><div class=""><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">This is actually an easy lift for Democrats. It is Democrats who have long defended trade laws that use tariffs to level the playing field for working people. Antidumping and countervailing tariffs are designed to address international price discrimination and subsidization that harm workers and businesses. Tariffs pursuant to safeguards are designed to protect jobs and businesses from import surges, even when there’s no allegation of unfair trade.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">It’s Republicans who have traditionally wanted to weaken, or even eliminate, those laws.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Recognizing that people are workers, not just consumers, is in Democrats’ DNA.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Not every tariff is going to be a good policy tool. So instead of reflexively attacking tariffs as price hikes, let’s return to our roots and focus on whether a <em style="margin: 0px; padding: 0px;" class="">particular</em> tariff plan will be good for workers.</p><h3 class="has-text-color" style="margin: 0px 0px 10px; padding: 0px; clear: both; color: rgb(7, 0, 163); font-stretch: normal; font-size: 24px; line-height: 34px; font-family: "Roboto Condensed", Helvetica, Arial, Verdana, sans-serif;"><span style="margin: 0px; padding: 0px;" class="">Will the Proposed Tariffs Help Workers? Nah</span></h3><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">The purported reason for the proposed Canada/Mexico tariffs is fentanyl. Fentanyl is a scourge, and fentanyl smuggling is a problem. The hollowing out of our industrial heartland has contributed to <a href="https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism?srsltid=AfmBOorOBw893xG31HFHpz_ntgJp0ttzb987mbwbmu2dpJY_05YSj2h7" target="_blank" rel="noreferrer noopener" style="margin: 0px; padding: 0px; color: rgb(13, 118, 166);" class="">deaths of despair</a>.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">How would blanket tariffs fix any of that?</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">If the goal is to rebuild those communities, then we need to understand that tariffs <em style="margin: 0px; padding: 0px;" class="">alone</em> don’t bring back manufacturing. The 2018 tariffs tended to shift production to places like Vietnam and Mexico. At a minimum, you need an industrial strategy to go with whatever tariff policy you’re proposing. Where’s the plan to rebuild those hollowed out communities that we’re not studying anymore?</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">If the goal is to stop fentanyl smuggling, then we need to understand that it’s … smuggling. By definition it avoids legitimate cross-border procedures. Not only are tariffs not going to fix the problem, but gutting the federal government will make it worse!</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Even more importantly, fentanyl is a demand-side problem. What’s the proposal to address that part of the equation? </p><h3 class="has-text-color" style="margin: 0px 0px 10px; padding: 0px; clear: both; color: rgb(7, 0, 163); font-stretch: normal; font-size: 24px; line-height: 34px; font-family: "Roboto Condensed", Helvetica, Arial, Verdana, sans-serif;"><span style="margin: 0px; padding: 0px;" class="">Doing The Same Thing Over and Over Again and Expecting a Different Result</span></h3><div class=""><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">So, as we can see, there are lots of ways to challenge the utility of a particular tariff policy.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">Why are we stuck on messaging price hikes when we <em style="margin: 0px; padding: 0px;" class="">literally just saw</em> that it doesn’t work?</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">We’re already inundated with tariff proposals, and there’s no end in sight. If we stick to a message that didn’t work with voters the last time around, we can expect the same results. Not different ones.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class="">And that can’t be what Democrats want.</p><p style="margin: 0px 0px 10px; padding: 0px; caret-color: rgb(133, 134, 140); color: rgb(133, 134, 140); font-family: Roboto, Helvetica, Arial, Verdana, sans-serif; font-size: 15px;" class=""><em style="margin: 0px; padding: 0px;" class="">February 10, 2025</em></p></div></div><div class=""><br class=""></div><div class=""><h4 style="margin: 0px 0px 5px; padding: 0px; clear: both; color: rgb(51, 51, 51); font-stretch: normal; font-size: 16px; line-height: 26px; font-family: "Roboto Condensed", Helvetica, Arial, Verdana, sans-serif;" class=""><span class="author-heading" style="margin: 0px; padding: 0px;">Author:</span> Beth Baltzan</h4><div class=""><br class=""></div></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><br class=""><div class="">
Arthur Stamoulis<br class="">Citizens Trade Campaign<br class="">(202) 494-8826<br class=""><br class=""><br class=""><br class="">
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