Tariffs a failure

The fury of the American voters spoke with the election of Donald Trump, and the root of that fury is money.

Trump spoke to the American worker about protecting jobs through tariffs — the taxing of imported goods. This type of protection sounds great except it has been tried and failed throughout history. These policies create a tax and then a counter-tax which ultimately stagnates trade, reduces economic activity and leads to higher prices.

One better option would be a reactive tariff. If we had tariffs that automatically set the tax rate at the previous year trade deficit, the market would self-regulate. A reactive tariff would level the playing field by automatically balancing trade regardless of currency manipulation, counter-tariffs and environmental neglect, but still allow free markets to operate with competitive advantages, keeping prices in check.

History has taught many lessons, but the most important is not repeating failures.

This story was originally published December 30, 2016 at 12:46 PM with the headline "Tariffs a failure."