Tariffs are taxes on trade. For much of the world's history, tariffs were popular because there was no other easy way to collect taxes. As technology permitted governments to collect sales, income and property taxes, tariffs began to disappear. The average tariff rate has dropped by fivefold worldwide since 1900. Tariffs became less popular as more nations came to appreciate the benefits of specialization of labor and more aware that tariffs are mostly used to prop up unproductive domestic businesses.

It is worth noting that maintaining unproductive businesses makes us much worse off over the long run. But, over the short run it does benefit those who own or work in that business. The process of unproductive firms closing, whether through trade with China or Kentucky, or through automation can be difficult. It often displaces workers and disrupts families and communities. This may well call upon the resources of government to better train and educate workers and insulate families from these events. That we single out trade with a foreign nation, but not automation or trade with Kentucky, is an comical side note to our understanding of labor market disruption.

Today we have embarked on a Trade War, whose primary benefit is reminding us of the immense benefits trade brings. The cost of this trade war is simply the suspension of the benefits of trade. By raising taxes on products by 10 to 30 percent, the trade war is forcing firms to pay rising prices or move their suppliers to different, more expensive places. Alone, none of these things is sufficient to cause a recession. However, the uncertainty surrounding new tariffs and the shift of thousands of product lines from one nation to another, combined with wholly predictable retaliation by our trading partners is enough to slow economic growth. Whether it is sufficient to cause a recession is a question time will shortly answer.