Americans Pay for Tariffs. They Pay More for No Tariffs.

Liberal and libertarian opponents of President Trump’s tariffs argue that Americans pay for tariffs and that those tariffs are a form of taxation. Tariffs were how the American government was funded before Democrats were able to successfully implement the otherwise unconstitutional income tax through the Sixteenth Amendment. Democrats preferred tariffs to taxes.

Why? Because they believed tariffs were regressive while taxes were progressive. Tariffs kept the poor from buying the cheapest products while taxes were weighed against the wealthy.

That’s still the thrust of their current ‘Walmart’ argument against President Trump’s tariffs.

But why are people crowding Walmart aisles in the parts of the country that voted for Trump? One reason is that Chinese products destroyed American manufacturing. Part of the price we pay for not having strong tariffs is the meth epidemic, the broken families, the rusting factories and the sense of hopelessness that hangs over formerly vigorous manufacturing towns.

Critics of President Trump’s tariffs are half right. Americans pay for tariffs, but they pay far more for having no tariffs. The most fundamental law of economics is that there is no such thing as a free lunch. Whether it’s Obamaphones from the local community welfare office or Xiphones from the local Walmart, there is a price to pay for what seems like cheap or free. Even if it’s invisible.

There are no free lunches or even cheap lunches. What we get from the government or from China is still subsidized and we are the ones subsidizing it at a higher rate than anything we’re getting. People believe that Obamaphones or Xiphones are free or cheap because they don’t connect what they are paying in other ways from what they are getting. But the social cost of government freebies or China cheapies eventually catches up to us.

If you think the price of tariffs is high, consider the cost of no tariffs which include everything from a national collapse to a world war against China. The cost savings of Made in China is paid out all over again in high taxes and government subsidies meant to defend economically and militarily against China. The more money we send to China, the more money we have to spend defending ourselves against China. The money we save at Walmart is paid out in taxes to build up a Pacific front against China and in subsidies for American companies competing with China.

Made in China doesn’t save us money, it costs us money. And eventually costs us everything.

The same people who told laid off steelworkers and coal miners to go back to college (Clinton), learn to code (Obama) or install solar panels (Biden) are now confronting a world in which the so-called ‘knowledge economy’ is no longer a safe harbor. What began with manufacturing will eventually encompass our entire economy and leave no class, no matter how professional, untouched. Those classes that aren’t currently directly affected share a country and an economy that is being hollowed out, and what starts with the Rust Belt will eventually reach NYC.

We traded our manufacturing for cheaper products from Asia. The price we paid for cheaper products was our economy. Libertarians think that’s a great bargain, after all we are getting cheaper products and that proves the market is working as intended, but a nation and a society are more than just the price of goods and services, and the price isn’t just measured in dollars.

America is selling its economic future to China on the installment plan and the low prices cushion some of the most immediate misery with no thought of what we will have left.

Tariff critics trot out claims that the average American household will pay thousands more per year, but those numbers, even if accurate, dwindle compared to the economic, social and national cost of outsourcing our economy. The real cost of cheaper products is that we have less money, worse jobs and a sluggish economy. The gadgets may be cheaper but their low prices are a drug that disguises deeper cost of living, cost of labor and retirement issues.

The price we pay for not having tariffs include fewer jobs, extended supply chains, a welfare state, huge police forces, high crime rates, drug overdoses, broken families, and the taxes to pay for all of this. A country with taxes rather than tariffs is more likely to have Democrats in power and to need them. That’s why we pay far more in taxes than we ever did in tariffs.

Tariffs mean that the price of Made in China will go. But what’s the price of having tens of millions of people out of work? What’s the dollar and cents impact on the economy of having a supply chain so entangled with a foreign enemy nation that China could bring us to a standstill? What’s the price of the detachment of companies from communities and losing our economy until the only jobs left are in the government, its subsidized organizations or for foreign corps?

And even the eternal appeal of Made in China cheapies will fade because what happens when China has enough economic leverage that it no longer needs to ‘dump’ products in the U.S.?

What happens when American competition no longer poses a threat, our economy and currency are worthless, and the People’s Republic of China shows us what the prices really look like?

Yes, we can still get cheap junk from China at Walmart, Amazon and the few remaining 99 cent stores, but observers will notice that it’s no longer as cheap as it used to be. China’s decades of product dumping is making us less of a rival and allowing it to slowly assert its dominance. The day will come when the dumping ends and we discover that we had a choice between fighting an economic war and suffering economic dishonor, and we chose dishonor because we wanted that $300 flat screen TV only to have dishonor and TV’s that cost ten times as much.

There was a time when we understood that cheap is about as expensive as it gets.

We traded products that lasted and worked for ‘cheaper’ products that don’t last and don’t work. What we once bought once in ten years, we now buy every other year because it seems cheaper in the short run even though it’s actually four times as expensive in the long run.

The more China hollows out our economy, the more we can’t afford to buy anything except China’s cheap junk. Without good jobs and good products, we’re stuck with no jobs and the Walmart aisle. The Made in China products we buy have no future, but in a Made in China economy, America has no future.