Tariff proponents say U.S. needs trade fairness, but critics warn costs of American goods will rise

President Joe Biden held a press conference Tuesday extolling the tariffs on Chinese products — including steel, aluminum, electric vehicles, solar panels and semiconductors — he is rolling out. The president argued that China aggressively subsidizes the products America imports, which makes it difficult for U.S. businesses to compete.

“Back in 2000, when cheap steel from China began to flood the market, U.S. steel towns across Pennsylvania and Ohio were hit hard,” Biden said.

The tariffs will likely shore up support from labor unions whose jobs will be protected from competition, but critics argue that the tariffs ultimately cost every American consumer.

New boss

Yaël Ossowski, deputy director of the Consumer Choice Center, a nonpartisan free-market advocacy nonprofit, told Just the News that Biden’s tariffs are a continuation of many of those enacted under former President Donald Trump.

“It’s essentially the new boss meets the old boss,” he said. By adding tariffs on these products, especially sourcing materials for products, it means that domestic consumers are going to pay more.

“By winning this trade war, so-called, it just means that there's going to be less money at the end of the month for you and for me. So tariffs like this are realistically just taxes on consumers to make things more expensive,” Ossowski said.

U.S. Trade Representative Katherine Tai was asked about the impact of the tariffs on prices at a White House press briefing Tuesday.

“I think that that link, in terms of tariffs to prices, has been largely debunked,” Tai replied.

Tai didn’t provide any details on how the claims have been debunked. In a sarcastic open letter to Tai posted on the blog “Cafe Hayek,” Donald Boudreaux, professor of economics at George Mason University, said that Tai’s claim overturns 250 years of economic theory and evidence, and he asked her for evidence to support the claim.

“Can you direct me to the work of the mysterious genius who has debunked the idea that, after domestic producers complain about foreign competitors ‘stealing’ their markets with unfairly low prices, the tariffs that are imposed in response to these complaints do not result in higher prices?” Boudreaux said.

Biden rewrites history

When Trump was enacting tariffs against Chinese goods, Biden argued in a 2019 tweet that tariffs increase prices.

“Trump doesn’t get the basics. He thinks his tariffs are being paid by China. Any freshman econ student could tell you that the American people are paying his tariffs. The cashiers at Target see what’s going on — they know more about economics than Trump,” the tweet stated.

Proponents of the tariffs argue that China heavily subsidizes the products it produces, which makes them so cheap and makes it impossible for American companies to compete.

Ossowski said that every developed country, including the U.S., does the same thing in an effort to seek an advantage on the global market.

“There's a false assumption that subsidies are the best way to provide lower prices for consumers. That's actually wrong. We need more innovation, more competition. You get more of these companies competing for our dollars. We’ll have way better products than in a subsidized market,” he said.

Just as the Biden administration now insists about Biden’s tariffs, Trump argued during his administration that his tariffs don’t hurt consumers. In an August 2023 Wall Street Journal opinion piece, Trump responded to an editorial in the Journal, which cited a Tax Foundation analysis claiming that Trump’s tariffs cost American consumers $80 billion.

Trump argued that “price increases for consumers were virtually nonexistent” during his term, and there was effectively no inflation.

“The trade deficit with China was down year-over-year for five straight quarters before Covid hit in 2020,” Trump wrote. Under Biden trade deficits grew, which Trump argued resulted in exported wealth used “to build up our enemies’ military strength.”

Globalized economy

In March, Trump discussed the impacts of China avoiding tariffs by building automobiles in Mexico and shipping them across the border to sell in the U.S. He said that he would, if elected, create a 100% tariff on those products. If he isn’t elected, he said, there would be a “bloodbath” for the auto industry, which many left-leaning media outlets took out of context.

Reuters reports that Biden’s tariffs will likely shift Chinese production to Mexico to avoid the tariffs, and U.S. officials say that absent measures to stop it, Chinese goods will still find their way into U.S. markets circumnavigating the tariffs.

“What that means, of course, is that the ‘bloodbath’ Trump predicted in March remains on course,” David Blackmon, energy writer and analyst, told Just the News.

Ossowski, however, said that China flooding U.S. markets with cheap goods is actually a good thing.

“For a consumer, that's an advantageous thing, because then we can choose. And we're free to choose if we want an American made solar panel or a Chinese made solar panel,” Ossowski said.

In a globalized economy, he explained, materials for every product are going to be sourced from around the world. The highly specialized aspects of these supply chains makes it advantageous to have countries that provide certain materials.

“It's just the next-level complex economy. And realistically governments that want to try to equalize it using tariffs and tariff policy, it just means that we're the ones who are gonna have to pay for it,” Ossowski said.

If the tariffs do make goods more expensive, this will ultimately drive up the cost of Biden’s climate agenda. The green economy Biden envisions relies heavily on Chinese goods and source materials.

With these tariffs, this transition to electric cars, electric appliances and wind and solar energy, Ossowski said, will be done by government force at artificially high prices.

“We don't have a plethora of Chinese EVs in the United States as of yet. But if we had that option, many American families might buy one,” he said.

With both Trump and Biden supporting tariffs in largely similar ways for similar reasons, the U.S. will have tariffs on Chinese goods in one form or another. It’s likely that for years to come, American consumers will have to live with whatever impacts the tariffs cause.