Tariffs as taxes on American buyers
In the episode with Don Boudreaux, Bob Zadek defines a tariff as something the United States government adds to the cost of an imported product to make it less desirable to Americans, so that they buy the now less expensive American product instead. On that definition, Zadek says, tariffs are a tax on American buyers, taxing Americans for exercising their free choice of buying a Chinese product. Boudreaux agrees with the framing and adds that Trump and his advisors have sometimes asserted that tariffs are really a tool to make trade freer in the long run. He identifies two problems with that claim. First, history knows only a tiny handful of situations in which raising tariffs caused foreign governments to lower theirs; by far what happens is retaliation, and that is what Boudreaux says was happening in the then-current situation. Second, he says Trump’s goal is for Americans to export as much as possible and import as little as possible, which Boudreaux calls mercantilism and describes as the way to make America poor rather than rich. Trump’s War on Trade (2019)
The same characterization appears in the episode with Casey Mulligan, where Zadek says he found himself pained by Trump identifying himself as the “tariff man,” and asks why he would tax American consumers merely because of their choice to buy something made in a foreign country. Mulligan’s answer distinguishes tariffs from quotas. Reagan, he says, mainly used quota arrangements, telling Japanese car companies there was a limit on how many cars they could send; the Japanese companies liked the arrangement because they no longer competed with each other for space in the American market, and Reagan administration veterans told Mulligan that Japanese companies would come to the White House and ask for a quota. Trump, by contrast, did very few quotas and used tariffs instead. Under either policy the consumer pays more, but with a tariff the money goes to the Treasury rather than to the foreign companies, which Mulligan calls an improvement. He notes that Milton Friedman made the same point in the Wall Street Journal in the 1980s, writing that Reagan’s quotas were so bad it would be an improvement to have a tariff man. You’re Hired! Chief Economic Adviser to Trump on What It’s Really Like to Work in the White House (2020)
The Kennedy tariff power and its later use
Paul Matzko recounts that Congress gave John F. Kennedy a unilateral executive power to raise or lower tariffs in the name of national security, with the intention that he could bypass the legislature to lower tariffs and promote free trade. Kennedy used the power to woo Poland and Eastern Europe away from the Soviet sphere by encouraging trading ties, a policy Matzko says was unpopular with conservative radio hosts, one of whose lines was that every penny spent on Polish ham was as good as putting a bullet in the gun of a Viet Cong soldier. The resulting boycott was organized by suburban housewives who printed cards and placed them in stores. Matzko then draws the connection forward: it is the same power that Donald Trump used to raise tariffs while claiming national security, raising tariffs on lumber from Canada and on steel and aluminum from East Asia, leading to higher prices for consumers for dishwashers and lumber. His formulation is that any tool given to the government to accomplish one end will someday likely be used to accomplish the opposite end by the other side. The Radio Right and The Fairness Doctrine (2021)
Tariffs and industrial policy
Scott Lincicome defines industrial policy as the government picking winners and losers in the market, and lists its elements: a focus on manufacturing rather than services or agriculture; targeted, firm-specific or industry-specific support rather than horizontal measures; an attempt to fix what the government believes to be market failures; and the requirement that the market-beating outcomes be generated within national borders. His example of the targeted kind is a tariff to protect the steel industry, as opposed to eliminating corporate taxes, which applies to everybody equally. He also gives the solar panel illustration: rather than giving consumers a $500 coupon to buy a solar panel, the policy protects and subsidizes the domestic solar panel industry, because the goal is American-made solar panels. Rethinking Industrial Policy (2022)
Currency manipulation
In the same episode as the tariff-as-tax discussion, Zadek raises the phrase currency manipulation and argues it describes nothing more than the Chinese government dictating that Chinese manufacturers sell their product for less, which makes everything Americans buy from China cheaper. Boudreaux agrees and adds that almost all currencies are issued by central banks whose purpose is to manipulate the money supply, so the Federal Reserve is by its nature a currency manipulator, as are the European Central Bank and the central bank in China; for one government to accuse another of currency manipulation is therefore hypocritical. He says the complaint is exactly backwards: if the Chinese government keeps the value of its currency low relative to the dollar, Americans get more for their dollars, which is good for consumers even though a handful of American merchants are made worse off. Zadek compares it to a country-wide sale in which China says every product is 10 percent off. Trump’s War on Trade (2019)
Across episodes
The topic is treated in the Epstein episode on free trade and comparative advantage, the Boudreaux episode on Trump’s trade war, the Mulligan episode on the White House economic adviser’s experience, the Matzko episode on the Fairness Doctrine and the Polish ham boycott, and the Lincicome episode on industrial policy. The excerpts show no development in the argument across these appearances: the same claim that tariffs are taxes on American consumers recurs, and the later episodes add historical instances rather than revising the earlier position.
What the sources do not cover
The excerpts do not state what any particular tariff rate was, which statute or bill authorized any of the tariffs discussed, or how any trade negotiation concluded. They do not give the outcome of the disputes over intellectual property that Mulligan mentions, beyond his statement that Reagan eventually got trade deals with Japan and the Asian tigers in his second term. The excerpts also do not state the founding date or full text of the national security tariff power Matzko describes, nor the amendment or provision on which it rests.