Analysis Shows Permanent China Tariff Could Benefit US Economy
Washington. The Coalition for a Prosperous America (CPA) has won the prestigious Edmund A. Mennis Award from the National Association for Business Economics (NABE) for a study showing that a permanent tariff on China would benefit the US economy. This paper sparks a useful dialogue among business economists about the efficacy of alternative trade policies to address the nation’s economic challenges.
The study, Decoupling from China – An Economic Analysis of the Impact on the U.S. Economy of a Permanent Tariff on Chinese Imports, co-authored by CPA Chief Economist Jeff Ferry and Senior Economist Steven Byers, modeled the effects of a 25 percent tariff on imports from China. It found that after five years the tariff would add $156 billion to annual GDP and 948,000 jobs to the US economy.
Ferry and Byers accepted the award on the afternoon on October 7, 2019 at the NABE Annual Meeting in Denver, Colorado. They also presented their paper and discussed its findings at the conference. Additionally, the paper will be published later this year in the NABE journal, Business Economics. NABE’s annual meeting is considered a major event for economists, and this year’s speakers include Fed chairman Jerome Powell as well as Art Laffer, Christina Romer, and many other leading economists.
“This is a very gratifying honor,” said CPA Chair Dan DiMicco. “It puts an important spotlight on CPA’s longstanding critique of free trade. Recently, mainstream economists such as Nobel Laureate Paul Krugman have recognized that excessive China trade has hurt America’s workers and domestic manufacturers. As Ferry and Byers have demonstrated, returning production to the United States can provide much needed growth and job creation for the overall economy.”
Michael Stumo, CEO of the CPA, said, "I am very proud of the cutting edge work of our CPA economics team. Receiving this important national award among a crowded competitive field of economic papers is an honor. We have long been concerned that standard economic models produce incorrect results, leading to trade policy that destroys US jobs. Our team has broken new ground on how decoupling from China will produce economic gains, rather than pain, even as America’s national interest is served."
“The effects of freer trade on the US economy are complex, and often negative for long-term economic growth and income equality,” said Ferry. “In this study, we attempted to show that activist trade intervention like tariffs, if implemented correctly, can produce positive results for the US economy. We are very grateful to the NABE for recognizing our work.”
Click here to read more about CPA’s 2019 Mennis Award from NABE.