Nobel laureate New York Times columnist Paul Krugman — who, according to the website SeethroughNY.net of the indispensable Empire Center earned $265,009 from the state of New York in 2017 on top of whatever he was paid by the Times — writes about Trump and trade:
In one way, Donald Trump's attack on our foreign trade partners resembles his attack on immigrants: in each case, the attack is framed as a response to evildoing that exists only in his imagination. No, there isn't a wave of violent crime by immigrants, and MS-13 isn't taking over American towns; no, the European Union doesn't have "horrific" tariffs on U.S. products (the average tariff is only 3 percent).
Well, a 3% tariff imposed by Europe on American goods may not seem "horrific" to Professor Krugman. But what he doesn't say is how that compares to America's tariffs on European goods. In 2017 America collected tariffs averaging 1.7% of imports. If Europe is taxing our stuff at 3% and we're taxing their stuff at 1.7%, that's going to strike a lot of people as unfair — especially if the American product is competing in Germany, say, against a French- or Italian-made product that's subject to no tariff at all. You don't have to be Peter Navarro to believe this. Here's the Handelsblatt, a mainstream German business newspaper:
US President Donald Trump may actually have a point when it comes to unfair taxes on US goods coming into Europe. That is the finding of a new study by a leading German think tank. ....
"The EU is by no means the paradise for free traders that it likes to think," said Gabriel Felbermayr, director of the ifo Center for International Economics, a division of the Munich-based ifo Institute. The European Union actually comes off as the bigger offender when compared to the US, he added. The unweighted average EU customs duty is 5.2 percent, versus the US rate of 3.5 percent, according to ifo's database.
So when Mr. Trump complains of "massive tariffs" he is not that far off the mark in several cases....
Cars are a particular sore point. Imports into the US are not quite free, but pay a tariff of only 2.5 percent, compared with the EU tariff of 10 percent on US car imports. Some other examples from the EU include a 17 percent tax on apples and 20 percent on grapes.
A 10% tariff on cars, 17% on apples, 20% on grapes are hardly the "only 3%" that Professor Krugman misleadingly tells his readers. If Professor Krugman can't understand this, imagine if the Trump administration decided to charge an extra three cent tax to internet users who clicked on the columns of New York Times columnists who also held paid professorships at New York State-funded institutions of higher education. And imagine that this tax did not apply to the other New York Times columnists. Professor Krugman might prefer to be treated the same as the other columnists, so that the government wasn't pushing readers in the direction of choosing one columnist over another columnist.
Mr. Trump's been saying all along that he wants free trade but that the key word is reciprocity. In general I'm for lower taxes, not higher ones. But if Professor Krugman is really worried about a trade war perhaps he might consider that the responsibility for one doesn't lie entirely with Mr. Trump and Trump's imagination, but rather that some of the responsibility is with the Europeans.They could lower their tariffs on American goods to zero, but the Europeans would rather protect their own goods — apples, cars, grapes — from foreign competition.