President Trump, by his own declaration, loves tariffs. In fact, tariff is his “favorite word.” Tariffs purportedly produce funds, “billions and billions, more than anybody has ever seen before,” which can be used for essential spending or to reduce taxes and meanwhile will “bring back jobs.”
The president is all in on his enthusiasms. As matters now stand, he is imposing both universal baseline as well as country-specific tariffs, affecting more than $1 trillion of imports. This compares to the mere $380 billion in tariffs passed in 2018 and 2019 by the first Trump administration but will rise to $1.4 trillion when/if the temporary exemptions for Mexico and Canada expire in April.
There is a logic to tariffs which appeals to those with a protectionist bent. If foreign producers are selling in your country and taking profits which could otherwise be earned by domestic enterprises, why not make the cost of doing business higher for them and keep the profits at home?
Yet the history of tariffs is, to put it kindly, dismal. The 1930 Smoot-Harley tariff is America’s best known and most instructive experience with protectionism. In 1929, the League of Nations passed a resolution declaring that tariffs were destructive and should be ended by all. When Smoot-Hawley was introduced, Franklin Roosevelt campaigned against it. After the bill passed, 1,028 economists and even some business leaders like Henry Ford urged a veto.
President Hoover termed the measure “vicious, extortionate and obnoxious.” He signed it anyway at the urging of his advisors. Americans, especially the agricultural sector, were facing a perceived problem with overproduction, mainly due to electrification and other laborsaving innovations. Republicans generally agreed that prices were too low, and it would help pull us out of our economic slump if American producers were shielded from foreign competition.
Big mistake. Trading partners had warned of retaliation and indeed boycotts and reciprocal trading restrictions soon broke out. Canada, our most loyal trading partner, imposed tariffs on 30% of our products and formed closer economic ties to the British empire. France, Britain, and Germany all formed new trading alliances.
Yet initially, the medicine seemed to be working. Factory payrolls, construction contracts, and industrial production all profited from the reduced market competition.
But the loss of the inherent advantages of trading soon became clear. From 1929 to 1933, U.S. imports fell 66% and exports decreased 61%. World trade nearly ground to a halt, falling by two-thirds from 1929 to 1934.
Unemployment was about 8% when Smoot-Harley was enacted, but the promises to lower it further never panned out. The rate jumped to 16% in 1931 and 25% in 1932-33, falling back to pre-depression levels only during World War II.
Tariffs didn’t cause the Great Depression, but they clearly deepened and prolonged it. Without Smoot-Hawley, it might have just been another temporary recession, not much worse than many other economic downturns in our history.
The take-home message is that free trade is a voluntary interaction that reliably promotes prosperity, both in theory and in practice. It is a classic win-win for participants, in contrast to protectionism which is based on the principle that the stronger party wins by defeating the weaker one.
The 2018-19 tariffs imposed by Trump and expanded by the Biden administration proved the point once again, by reducing long-term GDP by 0.2% and resulting in the loss of 142,000 full-time equivalent jobs.
Still, Trump favors strength and domination, based on negotiations where he “holds the cards.” The lack of success last time has not dissuaded him from unleashing a barrage of tariffs with impositions, pauses, increases, suspensions, and escalations that have left producers around the world desperately scrambling to protect their businesses by anticipating his next move.
Trump is playing with fire here. If he does ignite a trade war that results in another downturn, he may find that the American economy is not as resilient as it once was. Decades of uncontrolled deficit spending have left us deeply in debt and without the reserves necessary to withstand much more fiscal abuse.
The lessons of history and the laws of economics are clear. Tariffs don’t work. Proceed with caution.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Before a resolution came about for a major union strike in the United States, one Arizona lawmaker was working on a proposal to provide some relief to his constituents.
Earlier this week, State Representative David Cook sent a letter to Mexico’s Consul General Yescas Mendoza to suggest “collaboration to explore diverting container shipments to Mexican ports, allowing goods to enter the United States through Arizona’s land ports of entry in an effort to minimize the economic impact of the union-led strike.”
State Representative @RepDavidCook Urges Cooperation with Mexico to Divert Shipments Amid U.S. Port Workers’ Strike
“With the current port closures, we need creative solutions to ensure vital goods continue to flow and to minimize economic disruptions. Working with our Mexican… pic.twitter.com/LPeuWohCqo
The strike of approximately 45,000 American port workers impacted 36 ports. Many within the country were bracing for severe economic consequences due to these actions.
Cook said, “With the current port closures, we need creative solutions to ensure vital goods continue to flow and to minimize economic disruptions. Working with our Mexican partners to use their ports offers a practical solution that benefits both our states’ and national economies. It is crucial that we keep the lines of trade open, and I am confident this proposal can help reduce strain on our supply chains until U.S. ports are operational again.”
In his letter to the Mexican Consul General, Cook wrote, “I believe that by temporarily diverting shipping vessels to Mexican ports, we can alleviate the pressure caused by U.S. port closures and help maintain the flow of goods into Arizona and other affected regions. Mexican ports, such as those in Mazatlán could provide the logistic support necessary to manage this redirection, allowing for a more seamless transition of goods into the U.S. via Arizona’s land ports of entry. This approach could serve as a valuable stopgap measure until the strike is resolved.”
The fears about the lasting effects of this strike proved to be short-lived, as the International Longshoremen’s Association and the United States Maritime Alliance, Ltd. quickly came to a “tentative agreement on wages.” Both entities announced their decision to “extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Two Arizona sisters, identified as Enedina N., 72, and Ubaldina N., 82, have been found dead in a White Nissan Pathfinder riddled with bullets off the side of Mexican Federal Highway 2, approximately 21 miles south of the border community of Sonoyta.
The two women, one holding dual-U.S.-Mexican citizenship and the second a permanent resident, were reportedly on their way to Caborca, Sonora, their hometown.
According to a Friday statement posted to X from the Sonora Attorney General’s Office (Fiscalía de Sonora), “The incident was reported at 10:30 a.m. on Friday, August 23, when two lifeless women were reported, from Arizona and originally from Caborca, where they were headed, identified as Enedina ‘N,’ 72 years old, and Ubaldina ‘N,’ 82, inside a white Nissan Pathfinder vehicle, which had bullet impacts and had overturned at kilometer 221+500 of the aforementioned road.”
Avanza investigación de ataque armado en carretera Sonoyta-Caborca; asegurados vehículo, armas y cartuchos tras operativo de búsqueda de los responsables
General Plutarco Elías Calles, Sonora, 23 de agosto de 2024.- Derivado de un reporte generado en la carretera… pic.twitter.com/KyDQLL9k7F
The authorities reported that investigators and from SEDENA and National Guard officers located a navy blue 2023 Ford F150, which had been reported stolen near the town of Quitovac, with “90 caliber 7.62×39 cartridges, three caliber 7.62×39 magazines, 22 rifle magazines, three ballistic vests and four AK-47 caliber 7.62×39 rifles.” The Mexican authorities noted that the “probable criminals” are still at large. According to Reuters, the particular stretch of Federal Highway 2, “is infamous for violence and the trafficking of migrants searching for better opportunities and security in the United States.”
Prosecutors for the Sonora AG’s Office said, “Security forces from three levels of government immediately initiated an operation to locate and arrest the criminal group responsible, with the support of specialized air and ground forces.” The Biden-Harris Administration’s Department of State told USA Today through a spokesman that U.S. authorities “are closely monitoring the situation.” The spokesman told the outlet, “We extend our deepest condolences to the family and loved ones of the deceased. We have no further comment at this time.”
Arizona outlet 12News reportedly spoke to the son of one of the victims on condition of anonymity Friday evening. He revealed that not only had his mother and aunt perished in the horrific attack, but their third sister had also recently perished from cancer. “My mother and my aunt were taken away violently from us,” he told reporters. “They were great people… they were great, loving grandmothers who loved to help their family and their community.”
The son told 12News that his mother and aunt lived in Phoenix but also owned homes in Mexico and would travel back and forth to visit family and vacation.
“This was so tragic, so shocking, that somebody like my mom and my aunt would be victims of such a crime,” he added. “Because they were just completely innocent people who just happened to travel the area.”
The son provided additional details of the sisters’ horrific deaths. He explained that his mother, who had been driving, was apparently shot in the head while the vehicle was moving at a high speed and died instantly, while his aunt was fatally injured when the vehicle left the road and rolled several times dying trapped in the wreck.
“This is tragic. Graphic. It just tears at the heart,” he said. “And not a single family member has received any information other than what they’ve actually seen on the news, and that’s also a tragic part of the story.”
He also told reporters, “Nobody has told us what is going on with the ongoing investigation. We don’t know anything about the investigation. They haven’t told us any arrests or any leads.”
The son said he feels that the brutal murder was a case of “wrong place, wrong time,” with the outlet noting that the attack took place in broad daylight, and the sisters appeared to be following guidelines given to U.S. tourists traveling in Mexico.
The son lamented, “The crime that is happening there, what happened to my mother and my aunt… it’s just not a recent thing, this has been going on for decades.” He continued, “There’s been a war on drugs since I was a little kid… I’ve heard it a million times. But it’s still going on. It’s still killing innocent people. It’s still killing grandmas. It’s devastating to the community, to the surviving members, and we don’t have an answer.”
On Sunday, June 2, authorities estimate that anywhere between two and three thousand Mexican nationals descended upon Phoenix and gathered beneath the scorching Arizona sun to vote. According to the Instituto Nacional Electoral, the Mexican government body charged with organizing the nation’s elections, only approximately 600 of those present at the Mexican Consulate Sunday were able to place their vote. A Spanish language outlet estimated the number to be up to 7,000.
Cuitláhuac Osorio Technical secretary of the Executive Directorate of the Federal Register of Voters of the National Electoral Institute (INE) told Conecta Arizona that the Mexican authorities are evaluating whether in-person voting should continue or if the government should switch to doing so electronically or at additional voting centers in the U.S. to accommodate Mexican nationals who are outside of the country on election day.
“Certainly, we did not foresee such an overwhelming participation, that so many people were going to suddenly appear before a Consulate; Having 2,000 or 3,000 people made the operation difficult for us in terms of being able to organize the lines, the resources and capacities that we had available to serve the citizens within the Consulate,” Osorio said (translated by Google).
In an interview with Maritza L. Félix, director and founder of the outlet, Osorio added, “We did not have that expectation of having that number of people outside the Consulate. It’s part of learning. We will have to evaluate other alternatives: for example, if this in-person modality would have to continue using electronic devices, if we would have to use ballots, if we would have to think about (more) voting centers. Nowadays the legislation does not allow it, that is, we were also limited to making the election within the Consulate. The INE will make a detailed evaluation, with all the recommendations.
Félix noted that likely many of the voters were, “People from New Mexico, from Texas, from northern Arizona, people who perhaps due to their irregular immigration status could not go to their homeland to exercise their right and decided to come to Phoenix.” The Mexican voters arrived as early as 5 AM on June 2nd coming from as far away as El Paso, TX.
“On this election day in which we witnessed there were thousands of people: according to representatives and volunteers of the INE, there were about 7,000 people who could have met at the consular headquarters. People from New Mexico, from Texas, from northern Arizona, people who perhaps due to their irregular immigration status could not go to their homeland to exercise their right and decided to come to Phoenix with the idea that there were 1,500 extra ballots. For example, the majority of people from Sonora who came could only vote for the Senate and the Presidency of the Republic,” Félix explained.
According to the outlet, the total number of Mexican nationals who voted from outside the country was 184,374, an increase of 87% over the previous election in 2018.
Governor Katie Hobbs hired a new press secretary of a migrant background, disrupting her hiring cap in the process.
Hobbs hired Liliana Soto, who immigrated from Sonora, Mexico, to Lompoc, California, at the age of 17, pregnant, and with her then-boyfriend, her child’s father.
Soto said she ran away to the U.S. out of the fear of shame she felt her teenage pregnancy posed, according to a 2021 interview with Palabra.
Soto’s father was also of a migrant background: he was an illegal Guatemalan immigrant living in Mexico, according to Soto’s 2021 “TEDxScottsdaleWomen” talk.
Soto came to Arizona after the birth of her daughter, where she would attend Arizona State University’s journalism school.
Hobbs announced a hiring cap, referenced by some as a freeze, in April after reporting broke in February that she expanded her office staff by 40 percent, or 40 employees. These hires came at an additional cost of about $4 million, though the state faces a $1.7 billion deficit.
As part of the hiring cap, the governor ordered department heads to strategize a $1.2 billion spending cut for the current and future budgets.
“Please note that these cuts will need to be realistic, feasible, and agencies should expect that most items on your list will be reasonably proposed as part of this year’s budget negotiation,” read the letter.
Hobbs denied the hiring restriction was a “freeze,” telling reporters that it was more of a “cap” since agencies were allowed to fill open positions already funded within the budget. Hobbs also clarified later that certain agencies such as the Department of Public Safety would be exempt.
Did @KatieHobbs's office not get their own memo about the hiring freeze?
February: An investigation reveals that Hobbs grew her personal staff by 40% at a $4M cost to taxpayers
Prior to breaking the governor’s hiring freeze, Soto was a University of Arizona assistant journalism professor working as a public affairs specialist for the Mayo Clinic and a freelance journalist.
For several years, Soto was also an ABC15 reporter implementing DEI initiatives like bilingual reporting and fostering inclusive environments, the former of which was considered an unprecedented effort and earned the station an Emmy. Soto’s employment with ABC15 also overlapped with the COVID-19 pandemic outbreak, during which time she was tasked with combating COVID-19 misinformation.
Last August, Soto had her border reporting class shoot and produce the documentary series “Beyond the Wall” focusing on the illegal immigrants who died crossing the desert in their attempt to get to the U.S. The focus of the series hinged around the questions: “Does the American Dream exist, if it ever did at all? How can we honor the identity of those who so often go forgotten?”
Soto’s hire comes amid public condemnation from Hobbs and top Democrats regarding a bill that would enable law enforcement to arrest illegal immigrants, HCR 2060.
As I’ve said time and time again: HCR2060 will hurt Arizona businesses, send jobs out of state, make it more difficult for law enforcement to do their jobs, and bust the state’s budget. It will not secure our border.
— Governor Katie Hobbs (@GovernorHobbs) June 4, 2024
Hobbs’ last press secretary, Josselyn Berry, resigned last year at Hobbs’ request after advocating for shooting “transphobes” hours after the Covenant School Shooting in Nashville, Tennessee.
Several months after resigning, Berry returned to her former employer, the dark money nonprofit Progress Now.
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