(ECNS)- The tariffs imposed by the U.S. government are bad domestic policies, and a bad foreign policy, said Michael Munger, professor of Political Science, Public Policy, and Economics at Duke University, in a recent interview with China News Network.
Munger is also a former staff economist at the Federal Trade Commission (FTC) during the Reagan Administration. He is one of the initiators of the "Anti-Tariff Declaration", which has garnered signatures from more than 1,600 economists, including Nobel laureates and former presidential economic advisors.
The Declaration warns that the current Trump administration’s tariffs are based on a mistaken understanding of American economic conditions and will ultimately hurt American workers through higher prices and a heightened risk of recession.
In the interview, Munger described the proposed tariff policies as a "disaster," stressing that the tariffs imposed so far have been extremely costly and failed to achieve their intended goals.
Munger refuted the notion that “tariffs benefit American consumers.” He said, "If a country manipulates its currency or has trade barriers, that is a harm to their consumers," he said.
He further explained in an article that tariffs are often imposed on inputs, not on final products. Although these costs may not be itemized separately on the receipt, they are eventually passed on to consumers. Usually, consumers don’t realize that the higher domestic prices are caused by keeping cheaper foreign products out.
Having studied the costs of tariffs since the early 1980s, Munger believes that U.S. trade barriers not only raise consumption costs but also harm American producers.
He emphasized that if U.S. trade barriers succeed in limiting foreign imports, it will thereby make it harder for foreigners to obtain the dollars they need to buy U.S. products, thus indirectly harming U.S. producers.
The Trump administration had claimed that tariffs on products like automobiles were designed to "protect America's automobile industry." However, Munger believes that the cost of trying to "protect" domestic industries with tariffs is far higher than the possible benefits.
In a 2024 article, he calculated that protecting a single steel mill job paying $80,000 could cost the broader U.S. economy at least $160,000, or even more, when accounting for higher consumer prices, lost innovation, and production inefficiencies.
"A firm that is protected from competition by contracts in restraint of trade, or by mergers that ‘protect’ their market power and margins, is subject to legal sanction. But then why is that kind of illegal protection not only allowable, but desirable, in the case of foreign firms?" Munger questioned.
