A Taxing Situation


Ask not what your country can do for you, a wise man once said, but how much it’s going to cost you for them to do it.

Bear this in mind as the Senate debates a bill that would slap new duties on imports from China. The legislation calls for a 27.5 percent tariff on almost $200 billion in Chinese products. And don’t let the politicians fool you–this is a tax that American consumers will pay, to the tune of $55 billion per year.

That’s exactly the same amount of money that computer viruses were said to cost the global economy in 2003.

I wouldn’t wish a computer virus on anyone, and I sure hope Congress doesn’t force that new import tax on Americans.

This latest turn toward protectionism springs from the fact that Chinese goods are pouring into our country like never before. They’ve increased an average of 17 percent over the last five years.

But, it’s really no cause for concern. “Political voices are rising to vilify imports as a grave threat to our economy and jobs,” wrote former Clinton trade official Richard W. Fisher in the Wall Street Journal last week. “The rest of us are busy buying record quantities of clothes, cars, electronics, toys, and other foreign-made products.”

And we’re choosing to buy them. That’s the key point here. For a variety of reasons–but mainly because of a combination of quality and value–Americans are buying products made abroad. Nobody should feel guilty about this, especially not in farm country. After all, foreigners buy what we grow. Free trade is a two-way street.

The benefits of increased trade are obvious. Since 1997, as Fisher points out, a wide range of imported products have seen their prices plummet. Computers are 86 percent cheaper. Video equipment is 68 percent less expensive. The cost of toys has dropped by 36 percent. Foreign competition deserves much of the credit–and these savings benefit individual Americans, who then have more dollars to spend on other goods and services in their own communities.

Too many people take the advantages of free trade for granted. When they think about these falling prices at all, they assume that price reductions are just the natural way of things. But that’s not true. All kinds of other expenses that do not face any meaningful competition are on the rise, including college tuition, health care, and cable television.

I won’t deny that competition can be frustrating. I raise hogs on my farm, and there’s a part of me that wishes I didn’t have to go up against Canadian pork or Danish ham. But I also know that Americans should have the right to figure out what constitutes the very best, based on the principles of competition. The flip side is that my products ought to be stocked on the grocery-store shelves of Montreal and Copenhagen.

And that’s roughly how the system works, though we need trade deals like the Central American Free Trade Agreement to iron out problems of unfairness. Although the United States allows many products from the Caribbean region to enter our country duty-free, those nations often impose large tariffs on the same goods if they’re made or grown in America. CAFTA fixes this problem.

In this age of globalization, we don’t hear too many people throwing around the term “isolationism”–it’s like an ancient relic from a bygone era. But protectionism and isolationism are just different branches of the same tree: outmoded ways of thinking that have no intellectual credibility or economic rationale in the modern world.

“It is not possible for this nation to be at once politically internationalist and economically isolationist,” said Adlai Stevenson in 1952. “This is just as insane as asking one Siamese twin to high dive while the other plays the piano.”

The same can be said about imports. If we try to “protect” certain industries, we’ll only “isolate” ourselves. So here’s what you can do for your country: Tell the politicians not to build new barriers between us and the rest of the world.

Dean Kleckner

Dean Kleckner

Deceased (1932-2015)

Leave a Reply