I have been teaching economics since 1967 — 40 years of it at George Mason University in Fairfax, Virginia. During that interval, economic reality has not changed. Just as Galileo’s law about the independent influence of gravity on falling objects has not changed, neither have the fundamental principles of economics. Economics is fun and simple. It’s made complicated by some economics professors — fortunately, not by my colleagues at George Mason University. Let’s apply some simple tools of economics to reveal outright myths, lies and tricks.
Who is punished by tariffs on imported goods? Let’s go through the steps. The Canadian government imposes high tariffs on American dairy imports. That forces Canadians to pay higher prices for dairy products and protects Canada’s dairy producers from American competition. What should be the U.S. government’s response to Canada’s screwing its citizens? If you were in the Trump administration, you might retaliate by imposing stiff tariffs on softwood products built from pine, spruce and fir trees used by U.S. homebuilders. In other words, the U.S. should retaliate against Canada’s harming its citizens by forcing them to pay higher dairy product prices, by forcing Americans through tariffs to pay higher prices for wood and thereby raising the cost of building homes.
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