Tariffs and trade wars still seem like a bad idea: open letter to the President

The National Taxpayers Union has organized the following letter, signed by more than 1100 economists, of whom I am one. It is mainly a copy of a 1930 letter, signed by1,028 economists, urging Congress to reject the protectionist Smoot-Hawley Tariff Act.

Here's the beginning:

"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. Much has changed since 1930 -- for example, trade is now significantly more important to our economy -- but the fundamental economic principles as explained at the time have not: [note -- the following text is taken from the 1930 letter]"

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Here's a link to the pdf file of the letter.

The international market for ironing boards

The Washington Post reports Indiana ironing-board factory faces stiff competition from Chinese companies.

"There is one factory left in the United States that manufactures the basic ironing board, and its survival against Chinese competition demands unrelenting, production-line hustle.

"The 200 people at the plant in this small town make their boards very, very cheaply and as fast as 720 in an hour. In three low-slung buildings without air conditioning, coils of cold-rolled steel are cut, welded, riveted and boxed, then loaded onto the Wal-Mart and Target trucks backed up to the loading dock. Paid with piece-rate incentives, workers emerge weary at shift's end.

"The people on the line are making pretty good money; it can work out to about $15 an hour," said Dave Waskom, 61, a tool and die maker who readied the plant's machinery for 37 years. "But they work like dogs."

"Yet loyalty and hard work are not enough.

The company survives in part because it convinced U.S. trade officials that Chinese firms were unfairly dumping ironing boards into the United States at less than fair-market value; in response, the United States levied anti-dumping taxes of 70 to more than 150 percent on its Chinese rivals."