America’s prosperity is today, as it has always been, rooted in principles of entrepreneurship and voluntary economic exchange. For 250 years, the United States of America has demonstrated to the world that a people left free to innovate and produce for themselves, and for all who trade with them, will enjoy increasing abundance, higher standards of living, and greater security both economically and militarily.
Since taking office in 2025, the Trump Administration has adopted steep protective tariffs by unilateral executive decrees. These measures have injected uncertainty and chaos into the global economy through wildly fluctuating rates and ever-changing orders. Cumulatively, they impose the largest tax increase on trade in almost a century. The proponents of tariffs portray these measures as acts of ‘economic liberation.’ Instead, tariffs invert the principles of liberty that ushered in an American-led age of human freedom and prosperity.
America’s Founding Fathers rejected the bestowing of political favors and the imposition of Mercantilism. In his instructions to Virginia delegates to the Continental Congress in 1774, Thomas Jefferson urged them to stand for the American colonists’ right to “the exercise of a free trade with all parts of the world.” Two years later, the Declaration of Independence enumerated the causes that impelled those colonies to revolution, among them a protest against King George III “For cutting off our trade with all parts of the world.”
This is from “Trade and Tariffs Declaration: A Statement on the Principles of American Prosperity.” Some economists led by Don Boudreaux and Phil Magness put it together. My contribution was to find a few typos and to get 3 of the main economists listed, and one of the others further down on the list, to sign.
Read the whole thing. You can also sign on if you’re a bona fide economist. Some other academics, e.g., in philosophy, history, and political science, are also listed.
If you aren’t in the categories above, you can support without being listed.
By the way, usually when I sign such statements, I pretty much know everything in them before reading them. But one big surprise I got was to learn the number in the following:
The American economy is a global economy that uses nearly two thirds of its imports as inputs for domestic production.
READER COMMENTS
Jon Murphy
Apr 19 2025 at 5:06pm
I am a proud signer of that letter. And, if it were physical, I’d have signed in large letters so the President could read it without glasses
nobody.really
Apr 19 2025 at 10:07pm
Ha! John Handcock would be proud.
I would be proud to sign–but since I regard pride as a vice, I will refrain.
Alan
Apr 19 2025 at 6:25pm
Alas, a friend of the magat persuasion tells me that the metaphorical first goal should be to “kill the lawyers,” i.e.to disregard all experts as they don’t understand trump’s true goal. This true goal is apparently to free (‘liberate’ if you will) the US from pernicious globalist influences and social changes. He says the economic pain is worth it. It seems that rational statements such as this are aiming at the wrong target. They just don’t care.
Jon Murphy
Apr 19 2025 at 6:39pm
Oh, if only it were such that Trump had a plan. A recent WSJ article shines some light on his decision-making process: he thinks whatever the last person who talked to him tells him to think.
Alan
Apr 19 2025 at 8:40pm
That’s a fair point and further complicates addressing this.
Rob Rawlings
Apr 19 2025 at 10:17pm
Non-economist. 100% supporter. Lets hope that (at the margin) it makes a difference.
David Henderson
Apr 19 2025 at 11:34pm
Thanks, Rob.
nobody.really
Apr 19 2025 at 10:38pm
Here’s my favorite statement in favor of free trade and against tariffs:
Henry George, Protection or Free Trade? (1886), chap. 6.
Alas, I suspect we’re preaching to the choir; anyone who is likely to find the statement persuasive is likely already persuaded.
The arguments set forth in the statement read like an exhortation to return to a status quo that the MAGA people rejected. As things get worse, maybe that will seem like an appealing option. But I’d like to find ways to speak to MAGA people where they are, and give them cause for hope.
Alas alas, I sense much of what MAGA people want is status, including the status that comes from having higher earnings than those liberal elites. If they can’t get that, I expect some will take satisfaction in seeing those liberal elites suffer–even at the expense of everyone else. I have no vision for how to placate such desires. So here is, perhaps, a more apt quote for this moment:
C.S. Lewis, published in the English literary magazine Time and Tide, vol. XXIV (September 4, 1943) at 717, “Notes on the Way,”—or perhaps as “Democratic Education” in 1944—and republished as “Democratic Education” in Present Concerns (1986) at 32-36.
Rob Rawlings
Apr 19 2025 at 10:43pm
Re: “You can also sign on if you’re a bona fide economist. Some other academics, e.g., in philosophy, history, and political science, are also listed.”
I maybe missing it but I don’t see anything in the link (https://anti-tariff.org/sign/) that states that only economists or other academics can sign
Craig
Apr 20 2025 at 10:21am
“You can also sign on if you’re a bona fide economist.”
Just curious what that means specifically? PhD? Professor? Just curious….
Andrew M
Apr 20 2025 at 10:47am
My university-supplied computer is blocking access to the anti-tariff.org website. Does anyone have any idea why it would do that? (The computer otherwise shows no sign of ideological bias!)
Warren Platts
Apr 20 2025 at 3:30pm
Kind of ironic they are citing Jefferson when he is the guy who also signed the 1808 Embargo Act.
David Henderson
Apr 20 2025 at 5:25pm
Good point. Jefferson talked a good game but didn’t act that way as president.
Have you been to Monticello? His grave stone is there. It lists his 3 proudest accomplishments: author of the Declaration of Independence, author of the Virginia Statute for religious freedom, and founder of the University of Virginia.
Notice what’s missing?
Warren Platts
Apr 21 2025 at 5:44am
The Jefferson Bible? That the only slaves he ever freed were Sally Hemings’ children? Just kidding. But yes, the 1807 Embargo Act was deeply unpopular and prompted an epidemic of smuggling. However, one good consequence is that enforcing the embargo gave the U.S. Navy valuable experience in enforcing blockades, particularly in logistics that proved useful during the Anaconda Plan of the American Civil War.
Jon Murphy
Apr 20 2025 at 6:39pm
Some context is needed here. The Act wasn’t signed as an anti trade Act, or even as a protectionist act. Jefferson did it because American ships were being targeted by British and French ships. Jefferson was afraid of the US being dragged into the Napoleonic Wars, and so the Act was intended to prevent the impressment and targeting.
It was a terrible idea and ultimately failed, yes, but there isn’t the “irony” you note.
Warren Platts
Apr 21 2025 at 5:46am
Nonetheless, the embargo was an early natural experiment with protectionism. It did jumpstart U.S. industry. For example, cotton thread production increased by over a factor of 10 as a result.
Jon Murphy
Apr 21 2025 at 6:43am
Economic historians explicitly warn against the incorrect interpretation you just gave. See, for example, Clashing over Commerce, pg. 135. (Indeed, Irwin’s discussion on the episode, which occurs earlier in the book, is well worth reading. I’m short, recall that both benefits and costs matter).
Warren Platts
Apr 21 2025 at 6:56am
All I’m saying is that the embargo prompted massive import substitution. Why? Because they had to. I’m not saying it boosted GDP. Yes, costs matter.
Jon Murphy
Apr 21 2025 at 7:32am
That is true.
It’s heartening to see you argue against protectionism and mercantilism so forcefully these past few posts of yours. Maybe you’re finally starting to come around.
Jon Murphy
Apr 21 2025 at 8:09am
One should also note that the embargo did not “jumpstart” American industralization, as you put it. Once the tariffs were repealed or reduced, those import-subsitute industries died off. It was the introduction of new machinery from Britain that made them competitive (see Chapter 3 of Clashing Over Commerce). The tariffs discouraged the development of American industry since Americans could not tap into the knowledge of foreign inventors.
Warren Platts
Apr 21 2025 at 12:13pm
Irwin is far from the last word on this stuff. Just because the 1808 embargo caused short-term pain, it does not follow that it did not cause long-term gain. When trade with Britain was restored in 1816 after the war was over, I think there was a 25% ad valorum tariff plus another tariff on top of that for British cloth. Production of cloth went from virtually nothing to 750,000 yards by 1860 (Rantakari 2003, Fig 1.1). The protections of the U.S. textile industry never really ended until the USA entered the free trade era in the latter half of the 20th century. Then, sure enough, the U.S. textile industry “died off” as you put it. But it was for the best, right, because all those laid off textile workers got jobs on the 737-MAX assembly line….
Jon Murphy
Apr 21 2025 at 12:31pm
True. But he is the best word on it.
True. That’s precisely the point. It went from nothing, to something when the embargo existed, back to nothing once the embargo was lifted (a move away from protectionism). After new tech was imported from Britain, then and only then, did the US textile industry sustainably expand. BTW, your cited paper includes this conclusion and explicitly rejects yours.
The tariffs did not cause this growth. The growth only occured once the tariffs were removed and new technology came in. You cannot point to two data points and make a mere assertion of a causal relationship. I warned about this exact error in March.
Warren Platts
Apr 21 2025 at 1:31pm
This is simply not true. The number cotton mills increased from like 15 to 87 between 1807 to 1810. By the 1820s, Lowell MA was outproducing Manchester England. If you’ll look at that Fit. 1.1 again, just eyeballing the chart, by 1830, production had increased to 100,000 yards. There were tariffs throughout this period and this was before the introduction of power looms in the 1830s.
Anyways, even if you were correct that production dropped to zero after the end of the War of 1812 because of “a move away from protectionism,” that’s pretty much a proof that the previous protectionism worked. This was proved again in the modern free trade era: once protections were removed, employment dropped by like 90% compared to its peak.
Warren Platts
Apr 21 2025 at 2:05pm
Don’t get me wrong: of course you all will argue that the gain in consumer surplus outweighs the loss of tariff revenue and loss of a strategic industry and the jobs associated with it. Of course, there are non-economic counter-arguments. But the economic counter-argument I would make is that laid off factory workers are not moving into more productive jobs; this reduces labor productivity and the national income takes a hit.
Or, I guess, one could argue that tariffs are fundamentally unfair. VATs, on the other hand, are fair because if you hurt foreign producers, then you should hurt your home producers equally.
Question: If Trump or Congress imposed a 10% VAT instead of a 10% tariff, would you be opposed to that?
Student
Apr 21 2025 at 3:32pm
Warren, think about what you are saying. You are saying by making things at higher cost, we are better off. You are just assuming that increasing textile production here is always “good”. However, there are opportunity costs. Something had to be given up to do that activity.
I currently have zero textile production at my house. Suppose someone came along and slapped a 1,000,000% tax on any textiles that I buy from the store. I would have to make those at home. Sure, textile production would increase at my house. But I would have to reduce my hours at work in order to produce the clothing I need. Since I am not as good at producing textiles as others, I would be foregoing a more valuable work to me (what I do for work) to do something less valuable (make textiles at home). On net, my household would be poorer for it.
The same thing is true of a village, a city, a state, or a nation. It’s the same thing at a different scale.
If it were more advantageous for me to make textiles, I would make textiles. But it’s not. By forcing me to, sure textile production at my house would increase. You are simply assuming that increasing textile production in little nations is beneficial for me. It is not.
Why is this so hard to understand? You and I are in fact living breathing examples of the gains from trade. Your actions defy your very assertions. You don’t even do what you are claiming is a good thing? Why not?
Why then do you simply assume that when the USA increased textile production in response to increased taxes that that was a good thing? Something was given up. If it were not more valuable, you wouldn’t need to force people to do it via a tax.
Warren Platts
Apr 21 2025 at 6:44pm
Student: Yes, yes, I know. That’s the consumer surplus argument that is also supposed result in gains from trade, increasing the national income. Thus one would predict that as we entered the free trade era, GDP growth rates should have gone up. Instead GDP growth rates went down: using FRED Real GDP annual Growth Rates (that extends from 1948 to 2024), the post-NAFTA period (1994-2024) average growth rate was 2.4%, but the pre-NAFTA (1948-1993) average growth the average growth rate was 3.4% (p = 0.086; Welch’s t-test). So under free trade, GDP went down by a full percentage point, when it should have gone up. And over 30 years, that adds up to real money.
Let’s look at Ricardo’s original model: the English wine-makers become cloth-makers. Since cloth-makers are more productive, overall labor productivity is increased, and the national income increases. Vice versa for Portugal.
Now lets modify the model a bit: we will add a third profession: janitorial services. Meantime, Portugal invents a new machine that doubles their wine production with the same amount of labor. Now they dump wine on the English market, putting the English wine-makers out of business. And since Portugal can still provide all their cloth needs, there is no need to import cloth from England. So the wine-makers can’t become cloth-makers and have no choice but to become janitors. This lowers their labor productivity while depressing the wages of janitors. Meantime, England is now running a trade deficit while the national income goes down. England is made worse off by free trade!
That’s what’s been happening in USA during the free trade era. You turn a factory worker into a Dollar Store clerk, you lower her labor productivity so her contribution to the GDP is less. Her wages are cut, and so she consumes less. And we run a trade deficit that turns us into the world’s biggest debtor nation. Thus it’s not surprising that GDP growth rates have declined during the post-NAFTA period.
Student, I understand you wanting to buy cheap, foreign textiles, but actually you’d have been better off buying American-made textiles because per capita GDP would be much higher now.
Student
Apr 21 2025 at 9:47pm
No I am wondering why you don’t act like that
Student
Apr 21 2025 at 9:51pm
If that’s the case, go live on a self producing compound and see how rich you get.
Warren Platts
Apr 22 2025 at 6:49am
Student: Those are Boudreauxvian talking points. You’re probably one of his students. 😉 Anyways, I told you’d be better off under the pre-NAFTA regime. Now I shall prove it.
Time period: 1994-2024 (30 years)
real GDP Growth rate: 2.5%
Current GDP: $30 trillion
Current GDP/capita: $87,000
real GDP Growth rate: 3.5%
Counterfactual GDP: $40 trillion
Counterfactual GDP/capita: $117,000
In other words, your GDP/capita is $30,000 less than it otherwise would have been if we had stuck with the pre-NAFTA regime. So, my question to you, Student, is would you rather have cheap clothes, or would you rather have an extra $30,000 per year?
Student
Apr 22 2025 at 10:08am
Well, first, while I am always a student… I am not literally a student. It’s a fun play on the etymology of the student t-distribution. Also, youre use of the word “prove” and how I would use it are a bit different. You are assuming that the entire one‑point drop in average growth rates (3.5 % → 2.5 %) was caused by free trade. In reality, there were many factors beyond free trade going on in the milieu. The period 1994 to 2024 had the dot com pop, 2007/8 crisis, covid, slowing labor force growth an an aging population with lower birth rates, etc. No credible study I am aware of (using appropriate causal methods) attributes the full percentage point change to trade liberalization.
In addition… the 1948–1993 was not really comparable. In the period of say 1948 – 1960, a large portion of the worlds industrial production was smoldering ruins. China was down as well (note they retreated from the world and de-globalized under the Qing‑Era trade restrictions). Under those conditions, it’s no surprise that American industry was booming, everywhere else was destroyed. Hence, simply comparing raw averages across such structurally different periods conflates many things going on with only trade policy effects.
If you really wanted to estimate (even that is not “proving” the causal effect of free trad on growth) you would want to use an approaches that builds credible counterfactuals and control for confounders, such as: synthetic‑controls comparing the U.S. to a weighted blend of similar economies that didn’t liberalize at the same time. Diff in Diff using pre‑ vs. post‑NAFTA outcomes in Canada or Mexico as controls as an example, or even structural macro models that jointly model productivity, investment, labor supply, and trade shocks.
You might want to read up on your Boethius… For you are falling prey to the post hoc, ergo propter hoc (after this, therefore because of this) fallacy.
John hare
Apr 22 2025 at 12:14pm
I think a point may be missed in this discussion. It’s not how many dollars you make or how cheap clothes and other necessities are. It is how much disposable income you have left at the end of the paycheck. And more importantly, what can you get with that remainder. If I have $10,000.00 in disposable income and you have $20,000.00 it sounds like you are better off. But if I can buy a boat for $10,000.00 in my economy and the same boat cost $30,000.00 in yours, then who is actually better off??
Warren Platts
Apr 22 2025 at 1:07pm
You’d be better off arguing Summers’ secular stagnation hypothesis. But if you look at the chart, you can see what happened. In the 1994-2024 period there are three recessions. There was the covid recession, but it was short and just eyeballing it, we’ve pretty much got back to the old trend line. It was the dot-com bubble and the housing bubble bursting. These really knocked the line to the right hard compared to the 1990’s trend line. What do they have in common? They were asset bubbles bursting.
In the previous 1948-1993 period there are nine recessions, and there were a couple of bad ones, but I don’t recall any of them being the result of asset bubbles bursting. What’s the main thing that changed? Free trade. And this is no coincidence. There are a few mercantilist countries that insist on running trade surpluses (China, Germany, Japan, and a few others) and thus create a global savings glut, and since we basically follow a policy of unilateral free trade, and have huge, safe, liquid capital markets, then the savings glut will flow into the United States and blow up asset bubbles that eventually blow up like soap bubbles. So I lay those two recessions squarely at the feet of free trade.
David Henderson
Apr 21 2025 at 10:45am
Thanks, Jon, for that information about Jefferson.
Jon Murphy
Apr 21 2025 at 10:53am
You’re welcome. By luck, I was just rereading the relevant chapters in Clashing Over Commerce before this conversation.
Mike Burnson
Apr 21 2025 at 9:33pm
Out of curiosity, what “free trade” is being cited as the starting point? At this stage, I can only compare the expression to the common liberal whining about “unrestricted capitalism”: there is no such thing. The US is confronted with myriad tariffs and trade restrictions from all over the world: Canadian tariffs on dairy, French restrictions on wine imports (domestic “methode champagnoise” are far superior to the common French houses), EU and others’ absurd limits on GMOs, Chinese tight restrictions on rare earths, and on and on.
Currently, the universal tariff is 10% (other than high-tariff and restrictive-trade China) and some 70 countries have approached the US to negotiate trade deals. This nominal tax will have barely any effect on domestic prices. By any normal standard, Trump’s threats of tariffs have been a spectacular success. The ultimate costs for imported goods are more likely to fall and American exports will rise, meaning more American jobs.
Warren Platts
Apr 22 2025 at 1:33pm
John, it’s your second economy that more aptly describes the current state of the United States economy. What you would do in that scenario is simply borrow so you can buy the damned boat. Take out a 2nd mortgage on the house, maybe put it on the credit card, go to the bank for the loan. And thus you keep going until you’ve racked up debt (running a trade deficit) that is 90%, 100%, 120%, 150% of your annual income and at some point, the bank stops making loans to you. Now look what you’ve done! You’re making the same amount of money, you can’t borrow anymore, but you’re still on the hook for a mountain of debt that includes a lot of interest payments. You have two choices: (1) major austerity; (2) bankruptcy. Neither one is fun. Better to exercise prudence and reverse the situation before it gets to that point.
As I think I said above, Net International Investment Position (NIIP) is currently at 90% of GDP and just looking at the chart, there is no sign that the trend is reversing itself. It is only going to get worse at the rate we are going. NIIP is the difference between what the ROW owes USA and what USA owes to the ROW. Or to put it another way, it is the sum of all past trade deficit, adjusted for value. Consider that we are by far the largest debtor nation in world history. And to continue the trade deficit will only make it worse…
Comments are closed.