Tariffs Could Have Helped Us Avoid the Current Inflation Spike

  By Amanda Mayoral   Summary Global supply-chain crises, over-dependence on foreign production and government stimulus best explain the current inflation problem. Policy makers should learn from current crises and enact policies to reduce our strong dependence on unreliable foreign suppliers. Tariffs can cause a one-time rise in prices, but they don’t cause persistent month-after-month…

War in Ukraine Highlights Critical US Dependencies on Russia-China Axis

War in Ukraine Highlights Critical US Dependencies on Russia-China Axis By Jeff Ferry and Amanda Mayoral   Summary Points The Russian invasion of Ukraine reveals the weakness of US industrial strategy and our over-reliance on imports in manufactured goods and raw materials. The US is import-dependent in many industries critical to US national security. A…

We Need to be Better at Industrial Policy

We Need to be Better at Industrial Policy By Amanda Mayoral, CPA Economist   Industrial policy is critical to competing in a global economy and maintaining our national security. In the world of U.S. economic policymaking, we need to stop wasting time debating whether to “do” industrial policy and rather debate how to improve it.…

U.S. Trade Policy: Over Half a Century of Unreciprocated Tariff Cuts

U.S. Trade Policy: Over Half a Century of Unreciprocated Tariff Cuts By Amanda Mayoral, CPA Economist   Summary Points: The US held high tariff rates from 1816 until the middle of the 20th century The US then cut tariffs more than most countries, often unilaterally, without also requiring tariff reductions by others Today, the US has…

Not All Tariffs Are the Same: A Case to Consider Optimal Tariff Policy

Not All Tariffs Are the Same: A Case to Consider Optimal Tariff Policy   By Amanda Mayoral, CPA Economist   Summary Points: Despite popular misconception, economic theory has long suggested that tariffs can benefit a country, particularly one like the US. The most advantageous tariffs are optimal tariffs. This is because optimal tariffs balance the…

Tariff Incidence in the Real World: Why Consumers (Mostly) Didn’t Pay the Steel Tariffs

Summary points: The import price of steel fell in the period following the 2018 imposition of a 25% steel tariff, an indicator that steel tariffs were not passed entirely onto consumers. Steel tariffs did not lead to a proportional rise in consumer prices of steel-intensive goods, such as automobiles. In many instances, firms will internalize…

The Negative Impact of GSP and Trade Liberalization on Developing Countries: A Review of the Economic Literature

The United States government has pursued trade liberalization for several decades. A substantial driver of this liberalization has been the assumption that more global trade would help developing countries become wealthier. However, there is considerable research that shows how trade liberalization policies have not always been the best tool to help support economic growth and…