Trump’s Tariff Whiplash

For all the lamentations about President Donald Trump’s unconventional volley of tariff threats over the past week, the result is remarkably sane — approaching ideal. The United States has ended up imposing no tariffs on either Canada or Mexico, and both countries have committed to increasing their focus on border security. Tariffs on China, however, have now increased by 10 percentage points across the board. And the enormous volumes of low-value Chinese packages that had been entering the U.S. market uninspected and untaxed under the de minimis exception will now face the full burden and scrutiny of other imports from that country.

China hawks have been demanding action along these very lines, and Trump has delivered it with a precision strike refuting claims that tariffs cannot be done well. Free trade, the argument goes, avoids the inevitable distortions that we should expect if special interests all get to plead for higher tariffs on their competition and lower ones on the products they need. The comparison has always been somewhat spurious. Where better to find endless favors and handouts, after all, than in 5,000-page “free-trade agreements” drafted in close consultation with industry? But now, more important, we see that tariffs can be imposed cleanly and consistently. Eliminating the de minimis exception even removes a form of special treatment for certain imports, further leveling the playing field.