Tariffs and trade protectionism are not only economically damaging, but also become a major driver of political corruption in the United States, Steve H. Hanke, a professor of applied economics at Johns Hopkins University said in a documentary of the China Global Television Network (CGTN) released on Wednesday.
It is a fact that tariffs drag down the standard of living in the United States, but this is just the tip of the iceberg. Besides downgrading the quality of life, tariffs spark a whole host of cumulative negative effects.
According to Hanke, trade protectionism fuels corruption, as corporations rely on lobbyists to secure tariff exemptions.
"The only thing they do is bringing down the standard of living in the United States. And there are a variety of other negative aspects in addition to bringing down the standard of living. And one, you get a lot more corruption because you get the politicians involved in setting the tariffs and the trade restrictions and protectionism. And people don't like that. And so, what you do, you hire a lobbyist to try to become exempt from the tariff. The exemptions that, tariffs were increased, but the exemptions for various groups went up tremendously. And why were the exemptions made? Because lobbyists were paying off politicians to vote for exemptions. So, it fuels a lot of corruption," said Hanke.
U.S. President Donald Trump on Monday signed proclamations to raise tariffs on aluminum from 10 percent to 25 percent and to end duty-free quotas, exemptions and exclusions for steel and aluminum tariffs. Trump claimed that the move would make America rich again and bring businesses and jobs back to the country.
Tariffs, trade protectionism become major driver of political corruption in US: expert
