The truth of tariffs explained by Ronald Reagan.

THE TRUTH OF TARIFFS EXPLAINED BY RONALD REAGAN

You see, at first when someone says, “let’s impose tariffs on foreign imports”, it looks like they are doing the patriotic thing by protecting American products and jobs, and sometimes for a short while it works, but only for a short time.

What eventually occurs is, first, homegrown industries start relying on government protection in the form of high tariffs, they stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then, while all this is going on, something even worse occurs - high tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers and less and less competition.

So, soon, because the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens, markets shrink and collapse, businesses and industries shut down and millions of people lose their jobs.

The memory of all this occurring in the thirties made me determined when I came to Washington to spare the American people the protectionist legislation that destroys prosperity.

Image credit: City Journal - William Inboden

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