Ed Gresser, PPI’s Vice President and Director for Trade and Global Markets, began 2024 looking at the intersection of the upcoming Presidential election and trade in PPI’s Trade Fact of the Week: The price of a 40-inch TV set has fallen by 99% in 25 years.
One of the policy proposals of the 2024 Presidential Campaign is former President Trump’s proposal to enact an additional 10% annual tariff on imports. Former U.S. Trade Representative Robert Lighthizer defended this proposal to the New York Times, saying:
“If all you chase is efficiency — if you think the person is better off on the unemployment line with a third 40-inch television than he is working with only two — then you’re not going to agree with me,” Mr. Lighthizer said. “There’s a group of people who think that consumption is the end. And my view is production is the end, and safe and happy communities are the end. You should be willing to pay a price for that.”
Gresser deftly takes apart this argument by looking at the history of the 40-inch plasma TV. He points out that efficiency in the supply chain has cut the cost of a 40-inch plasma TV from $22,900 in 1970 to less than $400 a few decades later. A 10% tariff on that TV would “set [consumers] back about $20 (or $60 if they wanted to buy three). Over the entire TV-making and -selling world, this would likely put some retail clerks out of their jobs, but likewise wouldn’t affect production.”
Gresser also looks at how President Trump would have the authority to impose new tariff system.
“Constitutionally, only Congress has the right to “lay and collect Taxes, Duties, Imposts and Excises.” Asked by the Times’ political team about how a President could create an entirely new tariff system by himself, the Ambassador cites some existing trade laws that might enable a President to declare a “national emergency” and impose it by decree.”