As the Wall Street Journal has repeatedly emphasized, President Trump’s tariffs are dumb. Very dumb, not only because they damage people in the targeted country but also the American people. Tariffs are a sales tax imposed on American consumers. An increase in taxes is never a good thing for people. Moreover, tariffs impose economic harm on the people in the targeted country because higher taxes result in a decrease in sales for foreign producers. Thus, the Journal’s point — Trump’s tariffs and trade wars equals dumb.
But what is equally dumb is when the targeted country retaliates with tariffs against the United States. When it does that, the results are the same as when Trump imposes tariffs on them. The retaliatory tariffs are a tax on the people who live in the retaliating nation. The tax hurts them.
Australian Prime Minister Anthony Albanese. Licensed under the Creative Commons Attribution 4.0 International license.
Attribution: Department of Foreign Affairs and Trade website – www.dfat.gov.au
One way to view retaliatory tariffs is as follows: Trump shoots foreign citizens and American citizens in their feet with his tariffs. The targeted nation retaliates by shooting its own citizens and American citizens in their feet with retaliatory tariffs. Thus, we have tariff dumbness on both sides.
What should a nation do when Trump hits them with tariffs? Nothing. It should not retaliate with retaliatory tariffs. The smart thing is to do is nothing.
But we all know that foreign regimes don’t respond that way. When Trump hits them with tariffs, the customary response is the dumb one — respond with retaliatory tariffs, which then angers Trump and causes him to add more tariffs onto the previous ones, followed by more retaliatory tariffs. The race is on to see who can engage in the most dumbness.
Therefore, congratulations to public officials in Australia, who have been among the nations that Trump has hit with tariffs. According to CNN.com, just before Trump’s tariffs on Australia went into effect, Australian Prime Minister Anthony Albanese stated, “Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. This is why Australia will not be imposing reciprocal tariffs on the United States.”
Now, that is a great example of tariff smartness in the face of Donald Trump’s tariff dumbness. Kudos to you, Australians!
