“a vast majority of economists argue that over all, tariffs cost more jobs than they create.” This has become almost a truism in the media but a graduate student who wrote this in an exam, without tons of qualifiers, would fail it. nytimes.com/2018/07/23/bus…
First, the standard teaching in economics is that tariffs affect the structure of jobs and not their quantity. The level of employment is determined by macroeconomic considerations and monetary/fiscal policy in particular.
It is possible that tariffs change the macro picture and the Fed doesn’t compensate, in which case tariffs can have employment effects—but the net effects are hard to figure out and certainly no one should be confident that they know the answer one way or another.
Now, in the simplest Keynesian macro model, tariffs would actually create jobs by reducing the trade deficit and increasing aggregate demand. GVCs etc only qualify the result and do not change the sign.
Or you can try to model growth effects, uncertainty, capital accumulation etc. But for every model that suggests tariffs reduce growth and employment, I can give you one that raises them.
None of this is to say these tariffs are a good idea. They are not because there is no indication they will achieve their stated goal. But please, please don’t use bad arguments, even if in a good cause. It comes back to bite you.
