By Dominic Pino
Wednesday, July 23, 2025
In responding to Trump’s tariffs, foreign leaders should
not impose tariffs of their own:
Milton Friedman wrote in his 1962
book, “Capitalism and Freedom,” “We would be benefited by dispensing with our
tariffs even if other countries did not,” rejecting conventional wisdom that
reciprocity was the foundation of trade. The “we” in his advice was the United
States, and even though his ideas on trade are not held in high regard by the
current U.S. government, other countries have shown willingness to take them
up. The global average tariff rate has fallen steadily over the past three
decades, and many of those reductions were done unilaterally to levels below
the maximum rates allowed by the World Trade Organization.
In recent years, Canada and Switzerland
both unilaterally eliminated all tariffs on manufacturing inputs. They did so
because they realized it was bad policy to tax their own manufacturing
companies extra. What was good for manufacturing companies is also good for the
people in general.
Read my latest piece for the Washington Post here.
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