ALL HE HAD TO DO WAS NOT BE DONALD:

According to a recent Peterson Institute for International Economics (PIIE) policy brief, a feasible reduction of trade barriers "could deliver a one-time reduction in [CPI] inflation of around 1.3 percentage points." The study is conservative, focusing only on trade restrictions that can plausibly be lifted in the short term, and its authors are careful to emphasize that the result would be a one-time outcome. The proposed reduction of trade barriers would not solve the problem of rising prices; but it would make today's high prices lower.

US consumers would welcome such short-term relief. If the Biden administration finds it necessary to sell oil out of the Strategic Petroleum Reserve despite its commitment to addressing climate change, why shouldn't it also recognize the need to reverse Donald Trump's tariffs? In 2021, according to the PIIE brief, these duties still applied to more than half of US imports "subject to high tariffs, penalty duties, or severe quotas."

Perhaps more importantly, openness, whether it is free trade or immigration, also contributes to consumer welfare in indirect ways. Though these effects are often hard to quantify, they are of first-order importance, which is why economists often turn to first principles when debating them.

One of the most important benefits of free trade is that it exposes domestic firms (and labor markets) to greater competition, which induces them to keep prices low and to innovate constantly to stay ahead of the curve. Similarly, immigration eases labor-supply shortages, and high-skilled newcomers can boost productivity and innovation. Forward-looking countries understand this and embrace immigration. The United Kingdom, for example, has adopted a new skilled-worker visa program that welcomes graduates of top global universities.

It is deeply misguided to restrict trade and immigration at a time when rising domestic prices are of paramount concern. Now that everyone is fixated on inflation, it is worth considering why inflation was so low these past two decades, despite full employment in the United States (prior to the pandemic) and despite ultra-expansionary monetary policies. Globalization (now a loaded term) arguably had a lot to do with it, as did automation (another loaded term).

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