New Study Faults Tariffs as Trade Weapon
January 08, 2020 5:11 PM
An argument often heard by proponents of higher tariffs is that they promote domestic job growth by restricting cheaper imports. Faced with higher costs, domestic producers will step forward to produce what was once imported. “Bring back those good jobs and make America a manufacturing powerhouse again.”
Turns out, they were wrong.
A recent Federal Reserve study found that in the aggregate, US tariffs have led to job losses for the US manufacturing sector as well as higher prices for US consumers. It indicates that while tariffs did reduce competition for some industries in the US market, this was offset by the effects of rising input costs and retaliatory tariffs on US goods.
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