Despite some initial signs of optimism, President Trump vowed to unilaterally impose duties on imported goods from Mexico. He won’t back down unless the country implements stricter and more effective border control. Although well meaning, Trump should heed the cautionary and historical narratives of futile tariffs.
Recently, a friend of mine purchased a high-end Range Rover. Actually, that characterization is a redundancy: all Range Rovers are high end. With sticker prices hovering around $100,000 – and many variants well above that figure – they’re not cheap. But then, you get what you pay for, right?
Not with British cars. Although India’s Tata Motors bought out the parent Land Rover company, the vehicles apparently maintain their notorious reliability issues. My friend is constantly on the phone with the local Land Rover dealership, dealing with a litany of issues.
As a bystander, I’m left wondering why British cars stink. It really comes down to futile tariffs, which only appeal to political pandering and not much else.
The U.K. has a long history of protective duties. Marketed as a means to strengthen British labor, tariffs have done the opposite. They “trained” manufacturers to skimp on quality because they knew that the government would shield their goods from competition.
What my misfortunate friend is experiencing is the legacy of this misguided policy.
Futile Tariffs Still Popular
Make what you will of President Trump, there’s one thing most can agree on: he’s an anachronistic character.
Most politicians talk about progress and turning the clock forward. Trump seems determined to push the clock back. I’m not just referring to some of his more questionable comments he’s made. Rather, I’m talking about his economic policies.
During the campaign trail, he railed against Japan as if he was resurrected from a time capsule from the 1980s. It was probably one of the most bizarre statements I’ve heard from a then-presidential candidate. And as President, he continues to raise eyebrows.
Take for example his multi-front economic wars. Worsening U.S.-China relations is already bad enough considering the economic toll it will lever. But recently, he’s taking Mexico to task. While I appreciate the underlying catalyst sparking the reaction, it’s the rash decision that remains questionable.
We don’t need to look at Britain’s history as we have our own. I call protective duties futile tariffs for a reason: they just don’t work.
With the Trump administration’s aggressive stance on this political tool, though, they better hope that this time, it’s different. If not, they can cause severe damage to themselves come 2020.