As voters consider the merits of the Trans-Pacific Partnership (TPP) and Europe awaits Britain’s exit from the European Union, international trade is a fixture in the news and a frequent topic among politicians. Among his trade-related policy prescriptions, for example, US presidential nominee Donald Trump has floated a 35 percent import tax on cars made by US companies in foreign countries—a response to Ford Motor Company’s plan to move its small-car production to Mexico.

“A terrible idea, for many reasons.”

Richard Schmalensee


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What do economists think about such protectionist policies? Chicago Booth’s Initiative on Global Markets asked its expert panel whether establishing import taxes on cars, among other items, would be a “good idea.” Some called it bad economics; others said it’d be a violation of World Trade Organization agreements. None of them thought it would be a “good idea.”

David Autor, MIT
“Taxing consumers to subsidize domestic production is bad economics and a violation of the WTO agreement.”
Response: Strongly disagree

Caroline Hoxby, Stanford
“What a ‘good idea’ is I do not know, but such tariffs would make the average American worse off.”
Response: Strongly disagree

Kenneth Judd, Stanford
“Consumers would lose. A few would gain, but there are more efficient ways to transfer income to people.”
Response: Strongly disagree

Richard Schmalensee, MIT
“A terrible idea, for many reasons.”
Response: Strongly disagree

Christopher Udry, Yale
“No. Just no. The example products were chosen to make this easy. The rare cases in which protectionism might be justified are excluded.”
Response: Strongly disagree

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