If there is one Washington, D.C.-based organization that is outspoken against the positions of CPA, it’s the Tax Foundation. They have been instrumental in getting many legislators to believe tariffs would be a “tax” upwards of $1,000 per household. The “good news” is that the new Section 122 tariffs will only be a $600 per household charge, the Tax Foundation’s Alex Durante wrote on March 13, which is about how much many Americans will be spending extra over the next three months as the price of gasoline approaches $4 per gallon from around $3.17 per gallon at this time last year. In other words, many things unrelated to tariffs raise inflation and contribute to the rising cost of living in America.
Durante was invited to go head-to-head with CPA Senior Economist Mihir Torsekar on April 10 in a debate about tariffs hosted by Ohio State University’s Center for Ethics and Human Values. Were tariffs a burdensome tax? If they were, are tariffs…unfair? This was the question the Center’s hosts wanted answered. Were tariffs justifiable, or are they simply too painful for Main Street?
“The economics profession has spent decades debating trade through the lens of efficiency, and in fairness, many believed that efficiency was the moral case,” Torsekar told a group of mostly undergraduates from Ohio State. “Efficiency can deliver savings at the register. But that framework has failed to ask who is really benefitting from this system. That’s the question we’re confronting.”
One of the reasons why tariffs are seen as a moral argument is because tariffs are supposed to create a cost burden to individuals. Companies can also be hurt, and lay off workers. America is in the throes of a cost-of-living crisis thanks mostly to the high cost of essential services like rent and insurance premiums. Wages in our services economy have not kept up and this is largely because of policy choices that have a sharp divergence between wage growth in high-productivity service sectors like financial services, and stagnation in manufacturing and other middle-income occupations, as Torsekar noted in a piece from January.
For decades, the prevailing economic framework taught us to see people only as consumers — to boost their well-being by delivering them the cheapest goods at the lowest prices, not by the work they do or the communities they sustain. That is a choice about what we value. And I think it’s the wrong one. I think trade policy should start with whether people have dignified, productive work — and whether the gains of economic growth reach the communities that make it possible.
At the debate, Torsekar told the students where he came from – two stark differences stand out. He lived among the ruins of globalization. Then, as a young economist schooled in global markets, he came up with reasons why that was a good thing.
Torsekar is from Toledo, OH. He was accustomed to seeing boarded-up houses and shuttered factories and neighbors struggling to find good-paying labor to support their families.
“It was so common to see that I never gave much thought as to why that was the case,” he told them. “I carried that ignorance with me when I was doing a fellowship at the Ohio Statehouse. Only this time, I had an econ degree and felt I knew enough to explain how the world worked.” He recalled how a friend at work mentioned that her boss’s husband lost his job to outsourcing. Politicians were talking about the hardships their constituents were facing as companies turned to imports. “But I explained to my colleagues why this was a sign of progress,” he said. “Comparative advantage. Countries specializing in what they do best and in the end, everyone wins!” he told them.
Since then, and through a few years working at the International Trade Commission, Torsekar has come a long way. Today, he finds himself more on the side of Toledo, OH than on the side of a big university economics department, or Capitol Hill economists.
“The cost of things that define middle-class life – housing, healthcare, education, childcare – rose nearly 170% since 2000, while median wages adjusted for those costs have been essentially flat. Since 1979, economy-wide productivity has grown 60%. Typical worker compensation? Up 16%,” he said.
Protective Tariffs Protect Workers
American workers will never win the battle of labor arbitrage. They will lose it against the Mexicans, and they will certainly lose it against Asia. Their wage levels work to their benefit, but undercut ours. And so, are tariffs just? That was the question of the day for Ohio State students who put on the debate.
“When workers lose jobs because of unfair competition, that is an injustice that policy should correct,” Torsekar said. “Tariffs are a just way to achieve this.”
He noted that nearby, roughly 40 miles from the college, was Honda’s Marysville, OH plant, the largest Honda manufacturing complex in the world. It exists because of trade pressure. In the 1980s, the United States used targeted trade measures to pressure Japanese automakers to make cars here instead of exporting them. Honda understood our concerns. Their response was to invest in Ohio.
Honda in Ohio has over 15,000 workers, and relies on some 134 suppliers across the state.
“That is what trade pressure produces when it is sustained and credible,” he said.
“The students in this room are going to inherit the economy that today’s trade policy builds. The Fed’s own survey says your age group – 18 to 29 – reports the lowest financial well-being of any generation. The rewards of this economy are flowing to capital, not to labor,” Torsekar said. “That is not a natural law. It is the result of choices — and it can be changed. So the question ‘are tariffs just?’ is really a question about what kind of economy you want to live in. One that measures success by the price of consumer goods while wages fall behind the cost of living? Or one that asks whether people have productive work, whether communities can sustain themselves, and whether the gains of growth are broadly shared,” he said, adding, “I think justice demands the second vision.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Are Tariffs a Burden? CPA Senior Economist Mihir Torsekar Debates The Tax Foundation at Ohio State University
If there is one Washington, D.C.-based organization that is outspoken against the positions of CPA, it’s the Tax Foundation. They have been instrumental in getting many legislators to believe tariffs would be a “tax” upwards of $1,000 per household. The “good news” is that the new Section 122 tariffs will only be a $600 per household charge, the Tax Foundation’s Alex Durante wrote on March 13, which is about how much many Americans will be spending extra over the next three months as the price of gasoline approaches $4 per gallon from around $3.17 per gallon at this time last year. In other words, many things unrelated to tariffs raise inflation and contribute to the rising cost of living in America.
Durante was invited to go head-to-head with CPA Senior Economist Mihir Torsekar on April 10 in a debate about tariffs hosted by Ohio State University’s Center for Ethics and Human Values. Were tariffs a burdensome tax? If they were, are tariffs…unfair? This was the question the Center’s hosts wanted answered. Were tariffs justifiable, or are they simply too painful for Main Street?
“The economics profession has spent decades debating trade through the lens of efficiency, and in fairness, many believed that efficiency was the moral case,” Torsekar told a group of mostly undergraduates from Ohio State. “Efficiency can deliver savings at the register. But that framework has failed to ask who is really benefitting from this system. That’s the question we’re confronting.”
One of the reasons why tariffs are seen as a moral argument is because tariffs are supposed to create a cost burden to individuals. Companies can also be hurt, and lay off workers. America is in the throes of a cost-of-living crisis thanks mostly to the high cost of essential services like rent and insurance premiums. Wages in our services economy have not kept up and this is largely because of policy choices that have a sharp divergence between wage growth in high-productivity service sectors like financial services, and stagnation in manufacturing and other middle-income occupations, as Torsekar noted in a piece from January.
At the debate, Torsekar told the students where he came from – two stark differences stand out. He lived among the ruins of globalization. Then, as a young economist schooled in global markets, he came up with reasons why that was a good thing.
Torsekar is from Toledo, OH. He was accustomed to seeing boarded-up houses and shuttered factories and neighbors struggling to find good-paying labor to support their families.
“It was so common to see that I never gave much thought as to why that was the case,” he told them. “I carried that ignorance with me when I was doing a fellowship at the Ohio Statehouse. Only this time, I had an econ degree and felt I knew enough to explain how the world worked.” He recalled how a friend at work mentioned that her boss’s husband lost his job to outsourcing. Politicians were talking about the hardships their constituents were facing as companies turned to imports. “But I explained to my colleagues why this was a sign of progress,” he said. “Comparative advantage. Countries specializing in what they do best and in the end, everyone wins!” he told them.
Since then, and through a few years working at the International Trade Commission, Torsekar has come a long way. Today, he finds himself more on the side of Toledo, OH than on the side of a big university economics department, or Capitol Hill economists.
“The cost of things that define middle-class life – housing, healthcare, education, childcare – rose nearly 170% since 2000, while median wages adjusted for those costs have been essentially flat. Since 1979, economy-wide productivity has grown 60%. Typical worker compensation? Up 16%,” he said.
Protective Tariffs Protect Workers
American workers will never win the battle of labor arbitrage. They will lose it against the Mexicans, and they will certainly lose it against Asia. Their wage levels work to their benefit, but undercut ours. And so, are tariffs just? That was the question of the day for Ohio State students who put on the debate.
“When workers lose jobs because of unfair competition, that is an injustice that policy should correct,” Torsekar said. “Tariffs are a just way to achieve this.”
He noted that nearby, roughly 40 miles from the college, was Honda’s Marysville, OH plant, the largest Honda manufacturing complex in the world. It exists because of trade pressure. In the 1980s, the United States used targeted trade measures to pressure Japanese automakers to make cars here instead of exporting them. Honda understood our concerns. Their response was to invest in Ohio.
Honda in Ohio has over 15,000 workers, and relies on some 134 suppliers across the state.
“That is what trade pressure produces when it is sustained and credible,” he said.
“The students in this room are going to inherit the economy that today’s trade policy builds. The Fed’s own survey says your age group – 18 to 29 – reports the lowest financial well-being of any generation. The rewards of this economy are flowing to capital, not to labor,” Torsekar said. “That is not a natural law. It is the result of choices — and it can be changed. So the question ‘are tariffs just?’ is really a question about what kind of economy you want to live in. One that measures success by the price of consumer goods while wages fall behind the cost of living? Or one that asks whether people have productive work, whether communities can sustain themselves, and whether the gains of growth are broadly shared,” he said, adding, “I think justice demands the second vision.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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