Donald Trump says he wants to impose a 45% tax on goods imported from China. Trump’s proposed tax would interfere with people’s freedom. It would be discriminatory. It would injure American consumers. And it would hurt the poor here and in China.
It’s no surprise to find the developer, reality TV star, and GOP presidential candidate urging measures that would benefit well connected businesses at the expense of ordinary people. Trump’s own history of collusion with the government — notoriously, he’s used eminent domain to steal property from private owners when he wants it for his projects — highlights his willingness to use state power to give corporations what they want. The costs don’t seem to bother him.
But they should bother us.
The Trump tax is designed to discourage people from doing business with producers and suppliers with whom they want to transact. It would involve forcible interference with people’s livelihoods and their commercial choices. More than that, imposing such a tax would mean increased, intrusive government scrutiny of import procedures and imported goods, especially given the black market to which the tax would undoubtedly give rise. The tax would unavoidably limit people’s freedom in significant ways.
Implementing a proposal like the Trump tax would be straightforwardly discriminatory. On Trump’s plan, producers would be taxed at an extremely high rate just because they lived on the wrong side of an arbitrary line called a border. The reality is that people in China deserve as much respect for their work, as much regard for their freedom and dignity, as people in the Unlisted States or anywhere else. But Trump seems to embrace the mistaken idea that Team America is engaged in a contest with Team China, and that Team America wins when Team China loses — even when it loses because Team America has hobbled its ankles.
In reality, there’s no such thing as Team America. There’s no such thing as Team China. There are governments, of course, that claim the right to control things in the United States and in China. But there’s no uniform set of interests and needs that unites all of the United States against all of China. Particular people have particular concerns, ones that differ from those of others on their side of the border, and they, not Donald Trump, are best suited to address those concerns through their choices in the marketplace.
Trump’s proposal will hurt consumers. Higher prices mean that consumers won’t be able to purchase inexpensive products that would otherwise be available to them. They’ll have to spend more on those products, or on pricey equivalents manufactured by American corporations, or they’ll have to do without. And because American corporations will be protected against competition from China, they won’t feel any pressure to improve their production processes and reduce their prices. Consumers will be the losers, while well connected businesses will be able to stay fat and lazy.
The consequences for poor consumers in the United States will be especially severe. With limited disposable income, they’ll be hampered significantly in their attempts to secure the goods they want. And, of course, if Chinese businesses lose market share and cut their workforces, or even close their doors, because of the Trump tax, Chinese workers, often much poorer than most Americans, will hurt, too.
Trump’s proposal seems designed to boost the profits of well connected corporations that can’t attract consumers on their own. Americans should say yes to freedom, yes to non-discrimination, yes to consumer choice and consumer welfare, and yes to the well-being of the poor in the United States and China alike. That means they should say no to the Trump tax.