Tariffs dressed as virtue are still tariffs

The CNBC report tells us that the Trump administration's latest round of global tariffs now face a legal challenge in trade court, and that the administration defends them on notably moral grounds: the tariffs, we are told, respond to other nations' failure to ban goods made with forced labor. I do not dismiss that moral concern. I argued, in The Wealth of Nations, that enslaved labor was both a moral abomination and — though this is the lesser point — an economic absurdity, since no human being deprived of liberty can be motivated to do more than the minimum fear extracts from them. The cause of free labor is genuinely just.

But I have spent a long career watching merchants dress their interests in the language of the public good, and I am not easily moved by the costume alone. The question I would put to any tariff framed as moral remedy is this: who bears the cost, and who collects the benefit? A restriction on imported goods raises the price paid by every domestic consumer, from the wealthiest household to the poorest workman's family. That cost is diffuse, invisible, and rarely mentioned in the press release. The benefit — protection from foreign competition — flows to a narrow class of domestic producers who are, as I once noted, always alert to any occasion that serves their advantage and rarely reluctant to petition the sovereign for relief.

The administration's argument, as CNBC reports it, is that the tariff is a punishment levied on countries that permit forced labor in their supply chains. This is the structure of a sanction, not a revenue measure. I have no objection in principle to a sovereign using trade as an instrument of foreign policy — defense and justice are the first duties of the state, and moral order is a form of justice. But the instrument must be calibrated to the declared purpose. A blanket global tariff that strikes every trading partner does not look like a surgical remedy for a specific wrong; it looks like a general restriction wearing a moral argument as its justification. That is precisely the mode of reasoning the mercantile interest has always preferred.

There is a further difficulty. The forced-labor justification, if it is genuine, implies a commitment to the welfare of the workers who are being exploited — workers in other countries, workers with no vote in any domestic election. Yet the effect of cutting off their nation's export trade is, typically, not to liberate those workers but to impoverish them further, as the enterprises that employed them — however badly — contract or close. I mark this as inference rather than established fact in any particular case, since I cannot observe the present supply chains directly. But the historical pattern is consistent: trade sanctions harm the ordinary laborer of the sanctioned country first and most, while the political class that permitted the abuse finds other revenues.

The trade court challenge reported by CNBC is, in this light, precisely the institutional check I would expect and endorse. Markets require the rule of law to function honestly, and that rule applies to the sovereign's own conduct no less than to the merchant's. A court that asks whether the executive has acted within lawful authority, whether the declared justification fits the actual instrument, and whether the cost to the consumer has been weighed against the asserted benefit — that court is performing the work of justice. I would not prejudge its verdict. I would only say that the argument we are punishing forced labor deserves the same skeptical examination as any other claim that a restriction on trade serves the public rather than a particular interest. Sympathy for the enslaved worker is the right beginning. It is not, by itself, sufficient reasoning for the policy that follows.