More than 1,100 economists on Thursday warned President Trump and Congress that protectionist trade policies will endanger economic growth.
The economists, which include 15 Nobel laureates and advisers to former presidents Reagan, George H.W. Bush, Clinton, George W. Bush and Obama, sent a letter to Trump and Congress to step back from tariff threats by arguing that similar action plunged the country into the Great Depression in the 1930s.
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“Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers,” the economists said in a letter led by the National Taxpayers Union.
“We are convinced that increased protective duties would be a mistake,” they wrote.
Trump has withdrawn from the Trans-Pacific Partnership and has repeatedly threatened to leave the North American Free Trade Agreement and levy tariffs on steel and aluminum imports as well as billions in imports from China, raising global trade tensions.
The president has gotten pushback from lawmakers on Capitol Hill who say that steep tariffs on a variety of good will only punish U.S. consumers and businesses by pushing up prices.
The economists said that in 1930 another group of more than 1,000 economists urged former President Hoover to reject the tariffs in the Smoot-Hawley Tariff Act.
“Congress did not take economists’ advice in 1930, and Americans across the country paid the price,” they wrote.
The group said that while much has changed in 88 years, including the growing importance of trade to the modern U.S. economy, “the fundamental economic principles as explained at the time have not.”
The economists argue that most sectors from construction to banks and hotels as well as U.S. agriculture would take the brunt of the tariffs.
“Our export trade, in general, would suffer,” they wrote.
The Trump administration recently delayed decisions on steel and aluminum tariffs for Canada, Mexico and the European Union for another month while negotiations continue.
The White House says it has worked out deals with Australia, Brazil and Argentina on their metal imports.
But groups such as the National Association of Home Builders say they are being hurt by tariffs averaging more than 20 percent that were slapped on Canadian softwood lumber shipments into the United States.
Since the beginning of 2017, the increase in the cost of lumber has risen enough to drive up the average price of a new single-family home by more than $6,000 and the average market value of new multifamily housing unit by about $2,400.
“These dramatic price increases are directly attributable to the lumber tariffs, which act as a tax on American renters and home owners, harming housing affordability as well as impeding job creation and economic growth,” said Robert Dietz, chief economist for the National Association of Home Builders at a press conference earlier Thursday.
The economists say that tariffs complicate global trading rules and make it harder for U.S. exporters to sell their products overseas.
“Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods,” they wrote.
They also urged Trump and Congress to consider the “bitterness which a policy of higher tariffs would inevitably inject into our international relations.
“A tariff war does not furnish good soil for the growth of world peace.”