Summary of "Ep 327 | Lower Tariffs Will Put America First" featuring Antony Davies on Kibbe on Liberty

Release Date: April 9, 2025
Host: Matt Kibbe
Guest: Antony Davies
Co-Guest: James Harrigan

Introduction

In Episode 327 of Kibbe on Liberty, host Matt Kibbe engages in a compelling discussion with economist James Harrigan and guest Antony Davies. The episode delves into the contentious topic of tariffs, advocating for lower tariffs to genuinely prioritize American economic interests. The conversation navigates through the complexities of free trade, protectionism, historical policies, and the broader implications of tariff strategies on the American workforce and economy.

Understanding Tariffs and Their Consequences

Antony Davies opens the discussion by highlighting the prevalent support for tariffs among the "America First" crowd, who believe tariffs will rejuvenate American industry and create jobs. However, both Davies and Harrigan, drawing on economic principles, argue that tariffs carry significant unintended downsides.

James Harrigan shares a powerful analogy inspired by economist David Friedman to illustrate the inefficiency of tariffs:

“When you impose tariffs on foreign cars, you protect the autoworkers in Michigan but at the expense of the farmers in Iowa. It’s not Michigan versus Japan or China; it’s Michigan versus Iowa.”
[03:21]

He emphasizes that tariffs merely shift jobs from one sector to another within the country, ultimately reducing overall economic efficiency and productivity.

The Seen and the Unseen

Davies references Frederick Bastiat's concept of "The Seen and the Unseen" to underscore how protective tariffs create visible benefits for certain industries while obscuring the broader economic costs inflicted on others.

“We should make more cars in America, but we don't see the other economies that we're destroying while we do that.”
[07:42]

This perspective highlights the interconnectedness of various sectors and the hidden repercussions of protectionist policies.

Historical Context and Political Realignment

Davies provides historical insights, drawing parallels between current tariff debates and past protectionist movements. He references former President McKinley, a historical Republican who championed tariffs and subsequently lost his congressional seat due to the backlash from his tariff policies.

“If the President shrinks the government to its 1892 size, I might suddenly become pro-tariff.”
[23:33]

This historical lens suggests that protectionist measures can have unpredictable political consequences, often undermining the very support they aim to garner.

Comparative Advantage and Market Efficiency

A significant portion of the episode is dedicated to explaining the economic principle of comparative advantage. Harrigan articulates that regions within the United States have differing strengths based on natural resources, culture, and regulatory environments.

“It would never make sense for Michigan to try to grow soybeans and for Iowa to drop growing soybeans. That would be a Maoist experiment in industrialization.”
[14:33]

By adhering to comparative advantage, regions can specialize in what they produce best, fostering overall economic growth and efficiency.

Tariffs as Taxes and Their Economic Impact

Harrigan demystifies the common misconception that tariffs are not taxes:

“A tariff is nothing more, nothing less than a tax. It’s a sales tax on imported goods.”
[20:30]

He further explains that tariffs ultimately lead to higher prices for consumers without generating significant revenue. The conversation delves into the impracticality of replacing income taxes with tariffs, emphasizing the limited financial benefits versus the broad economic harms.

National Defense and Trade

The discussion touches upon national defense arguments used to justify tariffs, particularly protecting industries deemed crucial for national security.

“Countries that engage in more trade are more peaceful. Trade fosters trust and economic interdependence, reducing the likelihood of conflict.”
[40:34]

Harrigan argues that robust trade relationships enhance national security by creating alliances and mutual dependencies, making warfare less likely.

Psychological and Political Implications

Davies and Harrigan explore the psychological impact of tariff policies on voters and the political landscape. Harrigan points out that the U.S. has historically relied less on tariffs as a revenue source, unlike in the past when tariffs were instrumental in funding the federal government.

“For the first time since the late 1950s, Washington has demonstrated that it’s possible to cut the federal government, adding a new tool to voters' minds.”
[24:46]

This shift in the political narrative could influence future elections, as voters become more aware of the economic implications of protectionist policies.

Proposing a Free Market America First Agenda

Towards the episode's conclusion, Harrigan outlines what a free market "America First" agenda might entail:

“Embrace freedom wherever it comes from—left or right—and stand against policies that diminish our freedom.”
[30:17]

He advocates for policies that enhance economic freedom, reduce government intervention, and promote entrepreneurship, arguing that these measures better serve American interests than protectionist tariffs.

Encouraging Collaboration and Cooperation

Davies underscores the importance of cooperation over coercion in fostering a healthy society and economy. He emphasizes that trade facilitates specialization and mutual benefit, which are cornerstones of economic prosperity.

“Cooperation is the tool. Trade allows us to concentrate on what we’re good at and exchange for what others excel in.”
[53:35]

Conclusion

Episode 327 of Kibbe on Liberty presents a nuanced critique of tariff policies, arguing that while the intent to protect American jobs and industries is understandable, the economic realities reveal that tariffs are counterproductive. Through insightful analogies, historical context, and economic principles, Antony Davies and James Harrigan advocate for a free-market approach that leverages comparative advantage and cooperation to genuinely put America first.

Notable Quotes

• “Imposing tariffs on foreign cars protects Michigan workers but sacrifices Iowan farmers.”
  – James Harrigan, [03:21]

• “A tariff is nothing more, nothing less than a tax.”
  – James Harrigan, [20:30]

• “Countries that engage in more trade are more peaceful.”
  – James Harrigan, [40:34]

• “Embrace freedom wherever it comes from—left or right—and stand against policies that diminish our freedom.”
  – James Harrigan, [30:17]

Further Resources

For more insightful discussions on economics and liberty, visit Free the People. To explore related content, check out the podcast Words and Numbers by James Harrigan and Antony Davies, which delves deeper into economic policies and cooperative models.