That the current crop of politicians don’t understand trade and tariffs is well known. Donald Trump and his administration really do seem to be labouring under the impression that imports make us all poorer. Entirely the wrong way around of course, imports are what make us richer, they’re the very point in having trade in the first place. We only send our own labour off overseas in order to gain access to what Johnny Foreigner can do better and cheaper than we can.
However, we might expect the distinguished politicians of earlier generations to have a better grasp on this but sadly not as Jimmy Carter has shown. This concerns those tariffs on the Canadian softwood imports. As I’ve pointed out before charging a tax upon such imports raises the price of such softwood in the US. Which makes houses–the US building style uses a lot of such wood–more expensive. This is not known as a way of making the populace richer, making it more expensive to build a place to come in out of the rain.
Think through that allegation there. Canadian people pay taxes, which the Canadian government uses to subsidise lumber, which means that houses in the United States are cheaper. You can see why the Canadian hordes might not be all that keen on this but why on Earth would Americans object? Don’t they like cheap houses or something?
Someone really needs to sit Donald Trump down with the standard entry level textbook. The point of trade is to get imports and the cheaper the better. If other people are subsidising them then we say thank you. Because it is those cheap imports which make us richer.
Jimmy Carter also gets this wrong:
Jimmy Carter was the 39th president of the United States.
I agree with the recent decision of the White House and the Commerce Department to impose anti-subsidy duties against Canada’s unfairly traded softwood lumber imports. This belated enforcement of U.S. trade laws will help millions of private timberland owners, American forestry workers and members of their local communities by leveling the playing field in the timber industry.
Timber sales are a major source of income for my own family, and we have suffered financially for many years from an unfair advantage enjoyed by our major competitor in this vital market.
This isn’t the point at all. We are supposed to be running the economy for the benefit of consumers, not producers. As Don Boudreaux points out this is simply to get things the wrong way around:
Defending the Trump administration’s scheme to punitively tax Americans who buy lumber from Canada, Jimmy Carter confirms that his grasp of economics is just as feeble as is Donald Trump’s (“Trump is right. Canada’s lumber trade practices are unfair.” May 10).
First, Mr. Carter fails to understand that we Americans are enriched whenever the prices we pay for imports fall, whether these falling prices result from foreign-government subsidies or from improvements in foreign-producers’ methods of production. The people made poorer by Canadian-government subsidies of Canadian lumber production are Canadians, not Americans. And the people harmed by U.S. “retaliation” are Americans, not Canadians.
Quite so, quite so. But it gets worse than this, much, much, worse. Jimmy Carter has spent decades working with Habitat for Humanity:
For over 30 years, former U.S. President Jimmy Carter and former first lady Rosalynn Carter have traveled across the world with Habitat for Humanity and thousands of volunteers, donating their time and voices to build and improve homes alongside Habitat homeowners. Their time and effort helps raise awareness of the critical need for affordable homeownership, and how Habitat helps homeowners achieve the strength, stability and self-reliance they need to build a better life for themselves and their families.
Since 1984, Habitat for Humanity’s Jimmy & Rosalynn Carter Work Project has drawn nearly 100,000 enthusiastic volunteers who have rolled up their sleeves to help build or improve homes in partnership with families in need of affordable housing. Together with the Carters, these volunteers have built, renovated or repaired more than 4,000 homes in 14 countries.
I regard building homes for those that cannot afford them to be noble work and so full marks to Jimmy and Rosalynn there. But do you note the contradiction here? A substantial cost of building a house the American way is the cost of the softwood that goes into building a house the American way. We’ve therefore got Jimmy Carter urging us all to volunteer time and effort in building housing for those who cannot afford it. At the same time as he’s urging government action to make building housing more expensive.
It’s possible to think that Upton Sinclair might have had a point here:
It is difficult to get a man to understand something, when his salary depends upon his not understanding it!
But I think the truth here is that Jimmy Carter just hasn’t bothered to think things through rather than he is so self-motivated. But then that’s the problem with trade tariffs, isn’t it, so few do think them through–restrictions on imports make us poorer, always.