Tariffs are becoming widely accepted by U.S. politicians and policymakers as an important tool for maintaining and rebuilding our industrial economy. But quotas, a related tool, can sometimes work better to restrain imports and encourage growth in domestic production, investment and jobs.
Tariffs are a progressive policy that reverse the negative economic effects of free trade, creating good-paying jobs, boosting working-class income, and reducing income inequality.
Proposals for new tariffs face a lot of criticism these days, from the media, from economists, and from foreign policy types. Part of the reason is that it’s Donald Trump making the proposals and many in those groups don’t like Trump. But the fact is that tariffs can work to build our economy. They have worked before and they have worked recently as well.
The U.S. dollar remains at about the same worldwide valuation in our latest quarterly Misalignment Monitor, continuing to create a double-digit import incentive to the great disadvantage of domestic U.S. producers.
Harley-Davidson announced it is moving production of its Pan America, Sportster, and Nightster bike models from the U.S. to Thailand. Harley’s growing Thailand production is directly incentivized by 60% Thai motorcycle tariffs and corporate tax breaks.
Deployments of solar power facilities in the U.S. by utilities, commercial customers,
and residential customers have risen substantially in recent years due to
technological progress, lower costs, and various tax incentives and credits from the
U.S. government.
As the demand for solar energy deployment in the United States continues to grow, foreign firms are reaping nearly all the benefits. Solar imports in 2024 are outpacing total demand and crowding out domestic solar manufacturers.
MP Materials, the only active rare earths mining company in the U.S., is making great progress. And yet at the same time, the company just reported a financial loss. The contradiction illustrates the challenges involved for the U.S. in rebuilding a rare earths industrial capability.
Aluminum imports into the U.S. have surged in recent years, with some product categories seeing a 380% increase since 2015. Many countries have already been found guilty of dumping aluminum into the U.S. at artificially low prices.
Excessive imports siphon demand for goods and services away from American producers and drive the government to run a budget deficit to cover that gap.
