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More Than 1,100 Economists Join NTU to Voice Opposition to Tariffs, Protectionism

The lowering of trade barriers between nations has been one of the great achievements of the global economic system in the postwar era. Trade agreements have enriched economies around the world and allowed people access to goods that would have been unimaginable in a harsh climate of economic protectionism. The current political moment has seen new trade barriers erected as well as additional threats to rescind trade agreements and play politics with trade conventions that have benefited everyone. National Taxpayers Union is joined by more than 1,100 economists urging opposition to this new economic protectionism in the following letter.

 

May 3, 2018

Open Letter to President Trump and Congress:

In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act. Today, Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers.

Congress did not take economists’ advice in 1930, and Americans across the country paid the price. The undersigned economists and teachers of economics strongly urge you not to repeat that mistake. Much has changed since 1930 -- for example, trade is now significantly more important to our economy -- but the fundamental economic principles as explained at the time have not: [note -- the following text is taken from the 1930 letter]

We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. A higher level of protection would raise the cost of living and injure the great majority of our citizens.

Few people could hope to gain from such a change. Construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose, since they produce no products which could be protected by tariff barriers.

The vast majority of farmers, also, would lose through increased duties, and in a double fashion. First, as consumers they would have to pay still higher prices for the products, made of textiles, chemicals, iron, and steel, which they buy. Second, as producers, their ability to sell their products would be further restricted by barriers placed in the way of foreigners who wished to sell goods to us.

Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them. Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods.

Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. A tariff war does not furnish good soil for the growth of world peace.

 

Click here to download a full list of the signatories in a sortable Microsoft Excel file.

Notable Signatories:

Alvin Roth
Stanford University
Winner, Nobel Prize in Economics, 2012

Richard Thaler
University of Chicago
Winner, Nobel Prize in Economics, 2017

Oliver D. Hart
Harvard University
Winner, Nobel Prize in Economics, 2016

Gary Hufbauer
Peterson Institute for International Economics

Roger Myerson
University of Chicago
Winner, Nobel Prize in Economics, 2007


Harvey Rosen
Princeton University
22nd Chair, Council of Economic Advisers, President George W. Bush


Robert C. Merton
Massachusetts Institute of Technology
Winner, Nobel Prize in Economics, 1997

James Heckman
University of Chicago
Winner, Nobel Prize in Economics, 2000


George Akerlof
University of California – Berkeley
Winner, Nobel Prize in Economics, 2001

Avinash K. Dixit
Princeton University

Raymon Riezman
University of Iowa

James E. Anderson
Boston College


Robert E. Lucas, Jr.
University of Chicago
Winner, Nobel Prize in Economics, 1995

Robert Shiller
Yale University
Winner, Nobel Prize in Economics, 2013

Vernon Smith
Chapman University
Winner, Nobel Prize in Economics, 2002

Wendy Gramm
Economist, Ronald Reagan and George H.W. Bush Administrations

Daron Acemoglu
Massachusetts Institute of Technology

Donald J. Boudreaux
George Mason University

Robert Engle
New York University
Winner, Nobel Prize in Economics, 2003

Eric Maskin
Harvard University
Winner, Nobel Prize in Economics, 2007


James C. Miller III
Budget Director, President Ronald Reagan

Eugene F. Fama
University of Chicago
Winner, Nobel Prize in Economics, 2013

Robert M. Solow
Massachusetts Institute of Technology
Winner, Nobel Prize in Economics, 1987

Edmund S. Phelps
Columbia University
Winner, Nobel Prize in Economics, 2006

Laura Tyson
University of California – Berkeley
16th Chair, Council of Economic Advisers, President Bill Clinton

N. Gregory Mankiw
Harvard University
21st Chair, Council of Economic Advisers, President George W. Bush

Jason Furman
Harvard University
28th Chair, Council of Economic Advisers, President Barack Obama

Alan Deardorff
University of Michigan

Gene Grossman
Princeton University

Douglas Holtz-Eakin
American Action Forum

Alan Blinder
Princeton University

Gordon Hanson
University of California -  San Diego

The Hon. Phil Gramm
American Enterprise Institute
Former Chair, U.S. Senate Banking Committee

 

J. Bradford Jensen
Georgetown University

 

 

Click here to download a full list of the signatories in a Microsoft Excel file.

Click here to download a copy of a PDF file of the letter.