Steel Tariffs and Why We Can ’t End Failed Government Programs

David BoazCatherine Rampell of the Washington Postwonders why President Biden has not repealed President Trump ’s costly tariffs on imported steel and aluminum from “our close economic and military allies, including the European Union, Canada and Japan.” If both the United States and our allies recognize the damage these trade barriers are doing, what are the obstacles to removing them?For one, the stakeholders that benefit from the tariffs — the steel sector — arelobbying to keep the trade restrictions. It ’s a “political inertia problem,” says Cato Institute senior fellow Scott Lincicome, because the tariffs have created a constituency that depends on them, and removing the restrictions could cause the industry some near ‐​term pain.That ’s a problem for economic reformers everywhere. Every tariff, subsidy, regulation, mandate, or other government program creates winners and losers. In most cases, a small number of winners, with the losses spread almost invisibly across the whole society. Economists call itconcentrated benefits and diffuse costs. The tariff benefits domestic steel producers and unions, and the costs are spread out over everyone who buys products made with steel or aluminum. Which group is aware and engaged in the debate over the issue? Obviouslythe steel companies.It ’s not just tariffs. The farm program benefits some farmers and agribusinesses handsomely, with costs spread across all the taxpayers and food buyers. Eve...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs