Opinion: Washington Can Control This Weather

By John Hood

RALEIGH — The weather hasn’t been kind to North Carolina lately — so we really can’t afford the policy storm now brewing in the nation’s capital.

President Donald Trump has long favored tax increases on imported goods. He advocated them as a young man in the 1970s. He advocated tariffs against Japanese goods in the 1980s. Since then, he’s shifted his focus to goods made in China, Europe, Canada, and Mexico.

I think he’s profoundly mistaken. With very few exceptions, all related to national security, protectionism is a conspiracy against the public interest, a scheme to gouge consumers on behalf of politically connected industries and firms.

I also think it’s mistaken to interpret Trump’s victory in November as a mandate to hike import taxes. The top issue for swing voters was price inflation, followed closely by disorder on the border. Tariffs will raise consumer prices — that’s literally their function — and immigration is best reformed without picking other costly and unrelated fights. But no one should be surprised the president wants to implement one of the few positions about which he’s been consistent his entire life.

What does surprise and concern me is the chaotic way the Trump administration is approaching this. Will it impose stiff import taxes in a few days? Will they apply to all goods, or will some firms be permitted to lobby the administration for exceptions? These unanswered questions aren’t academic. They matter. Such uncertainty weakens business confidence and discourages investment.

North Carolinians, in particular, have much to lose from the resulting market disruptions. Take our agriculture sector. It remains a critical source of revenue and employment across our state — and is highly sensitive to changes in world prices for food and fiber.

Joe Glauber, an American Enterprise Institute fellow and former chief economist at the U.S. Department of Agriculture, pointed out in a recent paper that tariffs and counter-tariffs during the first Trump presidency hurt American exports of meat, dairy, specialty crops, processed foods, beverages, tobacco, and cotton. Any of those products sound familiar?

Farmers and agribusinesses lost billions of dollars in sales. Furthermore, Glauber wrote, American growers are “worried about permanently losing trade opportunities as major importers, such as China, look to competitors in countries such as Argentina and Brazil as more reliable suppliers of grains and oilseeds for food and animal feed.”

Here’s another troubling possibility: protectionism will make it harder to rebuild the homes, businesses, and infrastructure destroyed by Hurricane Helene. While North Carolina is a major producer of timber and paving materials, many buyers will be bidding for those commodities — and previous tariffs on Canadian lumber have already jacked up prices. The Wall Street Journal editorial board recently argued that Trump’s threat to hike the taxes still higher could delay disaster recovery in both North Carolina and California. “The U.S. can’t ramp up lumber production in the near term to meet domestic demand,” it wrote, “so contractors will have to eat the tariff cost on lumber from Canada or import more from other countries, which would be expensive.”

At the very least, North Carolina’s congressional delegation should press the administration to slow down and take a more methodical approach to trade policy.

Give our agriculture sector more time to find alternative export markets before provoking another trade war. Give our construction sector more time to satisfy the immediate demand for disaster recovery, and to figure out how best to meet the preexisting demand for affordable housing in North Carolina, before creating an artificial and costly timber shortage. And give our forestry sector and public agencies more time to open up more forest lands for harvesting.

Contrary to the claims of some conspiracy theorists, our government does not, in fact, possess secret technology to control the weather. The trade-policy storm in Washington is, however, entirely man-made. Whether you think its creation is wise, or agree with me that it is foolish, perhaps we can all agree that now is not the time to unleash it.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).