Lawson, Mitchell: How Trump’s tariffs affect US economic freedom, and why that matters

For a moment on April the average U S tariff rate leapt to making American consumers the highest tariffed people in the world For the next days the average U S tariff rate will be about which will leave Americans paying more than the citizens of any other industrialized nation putting us in the company of Sudan and Djibouti America despite what you may have heard is at present a pretty great place to live and work While Americans represent just of the world s population they produce more than of the world s GDP As a product U S median income is nearly nine times the global average and the U S poverty rate is about one-fortieth the global rate We have our problems Every nation does But Americans are among the healthiest and wealthiest people to ever walk the planet and are generally quite satisfied with their lives But this prosperity didn t just happen It was built on a foundation of economic freedom And by our calculations that freedom is rapidly eroding thanks to President Donald Trump s pact war Individuals are more economically free when they are allowed to make more of their own economic choices Governments can protect these choices by impartially safeguarding everyone s right to own use and exchange property Or they can limit economic choice through taxes regulations tariffs and manipulation of the value of money One of us Lawson has been measuring economic freedom for nearly three decades His annual Economic Freedom of the World review published by the Fraser Institute in Canada and the Cato Institute in the U S measures the degree of economic freedom in each of countries using indicators of regime initiative Ten of these indicators measure arrangement freedom reflecting its importance in overall economic freedom Numerous of us cherish economic freedom for its own sake believing that each of us has the inalienable right to choose our own vocation to spend our own tools as we see fit and to contract with others as we like But even if these considerations don t appeal to you you should value economic freedom That s because as has been documented in nearly peer reviewed studies it makes life better Compared with the least-economically free places people in the freest nations earn times as much live years longer and are more satisfied with their lives They also tend to be more literate more tolerant and less corrupt All of this helps explain why the United States which last ranked as the fifth-freest financial sector in the world is so prosperous Americans have long been several of the greater part economically free people on the planet U S contract freedom the area of economic freedom that gauges our ability to exchange with people in other nations is a key component of that It accounts for tariffs regulatory transaction walls controls and black-market exchange rates U S arrangement freedom peaked in the s at th in the world But as other countries allowed their own citizens to contract more freely the U S failed to keep up and by it had fallen to rd place As U S tariff rates have gyrated up and down we have re-run the numbers estimating the effects on U S bargain freedom and on U S economic freedom more broadly For the brief time this month when average U S tariff rates were U S arrangement freedom slipped to nd place just behind Haiti a country that the president has brutally mocked for its poor living conditions We also slipped to th place in overall economic freedom Now with average U S tariffs at U S business freedom has crept back up to th place just ahead of Rwanda while overall economic freedom remains th America is a great nation But our prosperity depends on our freedom and Trump s commerce war is a clear threat to that Robert Lawson is Fullinwider Chair in Economic Freedom and director of the Bridwell Institute for Economic Freedom at Southern Methodist University Matthew Mitchell is a Senior Fellow in the Center for Human Freedom at the Fraser Institute and a Senior Affiliated Scholar with the Mercatus Center at George Mason University They wrote this column for Tribune News Arrangement