• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • A Tariff Cut Can Boost U.S. Output



    The Federal Reserve recently cut its forecast for economic growth in the United States. That’s a problem. We need higher growth to create jobs and rebuild a prosperous middle class. However, there’s a simple way the government could combat continued weak growth: eliminate tariffs on inputs used by U.S. producers.

    Imports such as steel for carmakers, wood for homebuilders, and sugar for candy manufacturers help these U.S. industries produce affordable, high-quality cars, homes, and food.

    Because tariffs increase the cost of many inputs, they make it harder for U.S. companies to compete with foreign companies. In some cases, U.S. businesses have been forced to relocate to other countries where tariffs on inputs are lower. The government’s trade policy should make it easier for companies to operate instead of driving them out of the country.

    Our neighbors to the north and south are slashing tariffs on inputs in order to help their companies compete. Canada’s Economic Action Plan is phasing out many tariffs on manufacturing inputs. Mexico’s PROSEC program reduces tariffs on raw materials, parts, and other inputs used by industries including electronics, apparel, and automobiles.

    The United States should take a lesson in trade policy from our neighbors and permanently eliminate tariffs on products used by U.S. producers. This positive supply shock would boost U.S. output and put us back on the path to prosperity.

    Posted in Capitol Hill, Economics [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.