On tariffs – Ferdinand Mount in LRB:

“Donald Trump likes to tell us that ‘tariff’ is ‘the most beautiful word in the dictionary’. He does not remind us that the word comes from the Arabic ta’rif,or that such duties were first applied by medieval sheikhs and sultans in some of the places he has designated as ‘shithole countries’. They were not really things of beauty either, being modest tolls to raise a little revenue, not intended to keep out foreign stuff, and were seldom charged at more than 5 per cent. It was the same in ancient Greece and Rome: customs duties were charged at ports of entry at rates of between 1 and 5 per cent. In Rome, the portoria on luxury imports – silk, pearls, incense, pepper – could go much higher, up to 12 or even 25 per cent, but these were sumptuary taxes, to appease killjoys such as Seneca and Pliny. They too were not protective, being levied on goods that Rome could not produce itself.
Trump once scribbled a note on the way back from a frustrating G20 conference: ‘TRADE is BAD.’ Classical thinkers would have tended to agree, if not on quite the same grounds. Aristotle thought that the life of tradesmen and mechanics was ‘ignoble and inimical to virtue’. He rather approved of the way that Thebes disqualified business types from public office until they had been retired for ten years. In The Laws, Plato deplores people living near harbours: ‘Although there is sweetness in proximity for the uses of daily life; for by filling the markets of the city with foreign merchandise and retail trading, and by breeding in men’s souls knavish and tricky ways, it renders the city faithless and loveless.’ Self-sufficiency, autarkeia, was always preferable, trade at best a necessary evil. Only Pericles, according to Thucydides, had positive things to say about an open commercial society: The greatness of our city brings it about that all the good things from all over the world flow in to us, so that to us it seems just as natural to enjoy foreign goods as our own local products ... Our city is open to the world, and we have no periodical deportations in order to prevent people observing or finding out secrets which might be of military advantage to the enemy.
It was also Pericles, however, who brought in a law forbidding foreign-born Athenians from claiming full citizenship, which would certainly have appealed to Trump (though his wife would have fallen foul of the law, as indeed did the second wife of Pericles).”

(…)

“This is an unnerving parallel, and not the least unnerving aspect of the rise of the tendencies – isolationist, nationalist, populist or a combination of all three – which have so abruptly turned ‘globalist’ into a term of abuse. Chu, a BBC journalist of Chinese descent brought up in the North of England, is an acute guide, both to the historical resonances and the present economic realities, which leave even the most cocksure of us breathless and not a little baffled. We might start at the very least by looking further back beyond the 1930s, to try to trace the peculiar origins of protectionism as a weapon of choice in the armoury of modern governments. Trade history is too often a sideline reserved for economic historians, yet any effective study of the past four hundred years ought to move it to centre stage, as a prime generator of war and peace, stability and chaos, prosperity and dearth. As Clausewitz might have said, shooting wars are trade wars carried on by other means. Napoleon’s invasion of Russia, for instance, came after the tsar quit the Continental Blockade.”

(…)

“Mercantilism usually means cronyism. As soon as a government resorts to protection, it is besieged and then manipulated by entrepreneurs angling for contracts and subsidies. That certainly happened in France, where Colbert’s friends and relations collected most of the taxes and then dished out the proceeds to their own businesses. Samuel Daliès de la Tour, for example, was not only chief tax collector for the Dauphiné but also a big supplier of timber and iron to the rapidly growing navy, with a nice sideline in textiles and sugar and also shares in the great colonial companies – quite a match for the Rockefellers and Musks of the modern era. Rather than ‘l’État, c’est moi,’ Daniel Dessert writes in his scorching demolition of the Colbert myth, Colbert ou le mythe de l’absolutisme (2019), it was a case of ‘l’État, c’est eux!’ The same nexus of omnivorous oligarchs was to be seen in America’s Gilded Age, and now in the mob of tech bros crowding into the photo at Trump’s second inauguration. The itch to have it all had come to stay, along with a willingness to deploy every tool that came to hand: tariffs, blockades, monopolies.”

(…)

“The steel tariffs imposed by Carter, Reagan and George W. Bush had been equally ineffective – and costly. Trump’s yo-yoing between threats and hints at deals in the past few months are no more likely to do anybody much good, except of course the US Treasury, which according to Chu’s report for BBC Verify in July is now hauling in $28 billion per month in import duties, triple the rate last year. It is slowly dawning on the American public that, at the end of these tedious tussles, they are likely to be paying around 15 per cent more for their imports (18.2 per cent is Chu’s latest average figure, up from a mere 2.4 per cent under Biden, and the highest level since 1934). Trump is already trying to soften the blow by hinting at some kind of cashback from the Treasury to US taxpayers – which would only make the whole exasperating carousel seem more pointless still.”

(…)

“Or by contrast, take steel, since the days of Hamilton the prime target for tariffs. There is now a huge world oversupply of steel – which is indeed largely China’s fault and now China’s problem – but it is also the case that Western countries with an ailing steel industry, such as the UK, have, over the years, accumulated enough scrap for recycling to be able to meet most of their future demand for steel. They have only to offer a little judicious support to the necessary electric arc furnaces. The problem is eminently soluble without resort to tariffs, like so many other problems, such as the fact that the majority of the world’s advanced chips are manufactured, not in China, but in Taiwan by the Taiwan Semiconductor Manufacturing Corporation.”

(…)

“But the thesis that an economy can prosper only if it shelters behind an impassable tariff wall, and that these ingenious defences have no downside, is hard to maintain, especially if you look back at the dire history of the 1930s and then contrast it with the golden years after the war. It seems unlikely that tariffs will turn out to be the deciding factor of the late 2020s and early 2030s. It is the least convincing cliché of the age that ‘globalisation has passed its sell-by date.’ On the contrary, tariff mania seems like a frantic attempt to resurrect the past, not unlike those nostalgic monarchs who tried to keep the medieval tournament alive in the age of muskets and gunpowder.”

Read the article here.

Tariffs are mainly a symptom of nostalgia.

Also: “As soon as a government resorts to protection, it is besieged and then manipulated by entrepreneurs angling for contracts and subsidies.”

And tariffs are pointless, because the consumer need to get a cashback to make up for the his loss of purchasing power.