Trump’s Tariffs Are Bad, but Biden’s Tariffs Are Good

By Noah Rothman

Tuesday, August 20, 2024

 

During his long and self-indulgent farewell address to the Democratic Party on Monday night, Joe Biden attempted to make the case against Donald Trump’s reassumption of the presidency on economic terms. “Donald Trump wants a new tax on imported goods, food, gas, clothing, more,” Biden said in a veiled reference to the former president’s proposal for a 10 percent blanket tariff on imports. “You know what that would cost the average family, according to the experts? $3,900 a year in tax.”

 

Those are Trump’s bad tariffs — quite unlike Trump’s good tariffs, which the Biden administration inherited, held in place, and, in some cases, expanded. As CNN observed this summer, the price of consumer goods like “baseball caps, luggage, and shoes” are inflated by Trump’s trade barriers. Even though Biden railed against the costs they imposed on consumers on the campaign trail in 2019, the administration did nothing about them. Finally, “after a multi-year review of the duties was released last month, the Biden administration decided to keep them in place and raise the rate on a relatively small share of the impacted imports.”

 

Biden did not make a point in his speech of attacking Trump for seeking to impose even higher trade barriers on a suite of Chinese-made goods, probably because Biden himself has targeted China with tariff hikes. In May, Biden increased the cost of imported Chinese electric vehicles, semiconductors, solar cells, and batteries — just as Trump plans to do. But what other choice does Biden have? The federal government has invested vast sums of taxpayer dollars propping up the solar and electric-vehicle industries so that the cost of the domestically made versions of those products remain competitive. They would not otherwise be viable in a marketplace in which government-backed Chinese producers could compete, introducing market forces that compel innovation and ultimately lower production costs.

 

Joe Biden, Kamala Harris, and Donald Trump alike appear to agree that the price of electric cars and solar cells must remain artificially high to stop consumers from purchasing a more competitive product, freeing that capital up to be invested in more personally gratifying or productive pursuits. The consensus seems to be that the price of electric vehicles must remain artificially high even as consumer demand for that product peaks and carmakers scale back or delay plans to introduce new EVs. It’s just more evidence of how stark the contrast between the two competing presidential tickets is and why the stakes of this election couldn’t be higher.