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What have been the economic costs of the trade conflict between America and China? Who has borne these costs? How will the struggle end? And how acceptable was the status quo before President Trump initiated this trade war? To unpack these questions, I’m delighted to be joined by Scott Lincicome.
Scott Lincicome is an international trade attorney with experience in trade litigation before the Department of Commerce, the US International Trade Commission, the US Court of International Trade, the European Commission and the World Trade Organization’s Dispute Settlement Body. He has also advised private sector clients on multilateral trade deals and policies. Scott is a Visiting Lecturer at Duke University as well as an adjunct scholar at the Cato Institute where he researches trade policy.
Learn more: Is free speech compatible with free trade in China? | Tariffs are terrible economic policy, and it’s very hard to make them not terrible | Red flags in Xi’s China
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So, even if you are a free trader, and believe the mantra that it doesn’t matter what your trading partner does, you are still better off with 0% tariffs. It seems to me that if you are a liberty proponent, it seems like it might make sense to put pressure on China by getting manufacturers to ship production out of China.
Also, I sometimes hear on these ricochet podcasts that we will need more taxation options like say a VAT or even a carbon tax or something. Why is a tariff so inferior to these crazy new taxation schemes?
One reason you don’t see a lot of mention of: tariffs don’t apply evenly. If equality under law is the goal, tariffs don’t get you there. An impost (uniform tax on all imports) would, neatly keeping us out of the stew of corruption produced by our current tariffs, subsidies and income tax code and all the special interest pleading that go with them. We could then argue about just how uncompetitive we’ve made domestic producers with clearer heads.
Neither a VAT nor a carbon tax have a uniformity problem whatever else can be said for or against.