Tariffs Fail Us All-Except Against Slave Labor
Back when the Biden administration extended Trump’s steel tariffs in 2024, the move was sold to the public as protecting American workers. Factories reopened in breaking headlines, and Politicians took all the glory. However, according to the Bureau of Labor Statistics, washing machine prices had already jumped 12% after similar protections, and the automotive sector quietly cut thousands of jobs while costs soared. This looked like a massive win at first glance, but it was an illusion
This is a pattern we know all too well. Prominent economists, including Ludwig von Mises and Murray Rothbard, spent decades warning that tariffs are an illusion of prosperity —not a reality. Initially, countries appear stronger, but really there is a large, inefficient gap. By and large, especially in the way in which we collect taxes, tariffs do not work, but there’s one exception where we must ignore the benefits of free trade. In a true push for freedom, there is only one morally justifiable case for tariffs.
Price Signal Short Circuited
Prices are vital signals that carry necessary information, and tariffs completely obstruct those signals. They start by artificially inflating import prices; in turn, domestic producers make decisions that ignore actual demand and efficiency. Mises put it well: tariffs “injure the consumer... who is prevented from purchasing from more efficient competitors at a lower price.”
We’re left with capital and labor flowing toward industries that survive not because they’re efficient, but because they’re government-protected. This isn’t a free market — national industry chases Government preferences rather than consumer demand. When the 2018 steel tariffs took effect, investment flowed into steel mills—but not because American steel had suddenly become more competitive. This was not an actual market signal.
Short-Term Jobs, Long-Term Costs
On paper, and initially, tariffs save jobs- only briefly. A steel tariff leads to an immediate surge in hiring in the steel sector. Every job “saved” in steel destroys jobs elsewhere —ultimately, where the jobs should go. With reduced competition and a missing market signal, companies that use steel, such as automakers, construction firms, and appliance manufacturers, face rising costs and, in turn, they respond by cutting staff, raising prices, or moving operations overseas. A case in point: Harley-Davidson moved production to Thailand after steel tariffs tightened its margins.
Hayek explained that efficient markets depend on knowledge dispersed across millions of consumers and producers, each responding to local conditions.Tariffs eliminate the organic market process and replace it with political calculation, and bureaucrats decide which industries matter, not the consumer who is making the purchase and creating the demand.
Declining Competition and Innovation
Free competition is the driving force behind Capitalism. Tariffs are, in turn, the brake force. Monopolies exist rarely in an accurate free market, and in cases where they do, it’s not a free market; it’s a creation of Government interference. Walter Block stated: “exists if there are legal barriers to entry.” We see this often through regulation and red tape, and we see it again with tariffs. In their purest form, they are legal obstacles giving favored industries monopoly-like power over domestic markets.
Research from the American Action Forum confirms that tariffs discourage innovation by removing competitive pressure. Instead of developing better or cheaper products, firms focus their energy on lobbying to ensure continued protection. The long-term effect is quite predictable: fewer choices that come with a decrease in quality, and an increase in prices.
A Political Trap
Tariffs give industries a quick boost that shortly crumbles. At first, companies enjoy profits because foreign competition is gone. But those profits attract more players, flooding the market and erasing the initial gains. What’s left is an inefficient industry shielded from real competition. These firms don’t adapt; they become dependent on Government help and become efficient at lobbying. This creates a long‑term cycle of weakness and political dependency.
The Moral Exception: Tariffs Against Slave Labor
We can see, in theory, how tariffs are not sound policy. But there’s one morally profound exception-and it’s rooted in defending freedom itself. It’s based on our shared principle, in particular the free-market principle, that all human interactions must be voluntary. Coercion destroys both morality and markets. Slave labor, the basis of some industries in modern China, creates a strong case for tariffs.
Forced Labor in China
In China’s Xinjiang region, over one million Uyghurs are victims of state-enforced labor programs, indoctrination camps, mass sterilization, and surveillance networks designed to obliterate their culture.
International investigations, survivor testimony, and U.S. State Department findings confirm what’s happening: genocide, implemented through forced labor embedded across global supply chains. Cotton, solar panels, textiles, electronics—products Americans buy daily are tainted by systematic enslavement.
The Uyghur Forced Labor Prevention Act (passed in 2022) bans imports made wholly or partially in Xinjiang. Its logic follows moral guidelines: we WILL NOT profit from goods made by people deprived of their humanity and fundamental rights.
Why This Tariff Is Different
Tariffs are only justified when they protect liberty, not privilege. Goods produced through force, rather than voluntary exchange, are illegitimate from the start. The “market advantage” of slave labor does not come from efficiency or innovation; its foundation is in violence and coercion. In this circumstance, tariffs don’t function as protectionism; they function as a form of justice.
Three points clarify why this exception doesn’t contradict good economic principles:
Defense Against Aggression. Ethics forbid provoking force. When enslaved people make goods, voluntary exchange doesn’t exist. A ban defends consumers from unknowingly participating in such an immoral practice.
Correction of Market Distortion. Authoritarian governments put false signals into the market. This is a true market distortion, not brought on by the tariff itself. The tariff serves to delegitimize slavery.
Moral Coherence of Free Trade. Freedom precedes free trade. Trading with nations that enslave their workforce corrupts the moral basis of Capitalism. Markets are good because they’re built on voluntary exchange; we can’t profit from involuntary labor. This would be a contradiction of the highest order.
Tariffs Against Freedom vs. Tariffs for Freedom
Tariffs that protect ineffective domestic producers are anti-liberal and anti-market. They reward political connections, suppress innovation, and raise consumer costs while removing competition.
Tariffs targeted at systems of forced labor uphold the very principle freedom and free markets defend: voluntary exchange and human liberty. The only criterion we should consider them is if they preserve the very freedom we need for the market to be free.
In just about every other case, tariffs damage both freedom and prosperity. In the case of slave labor, refusing to impose them destroys both. The question facing proponents of free trade isn’t whether markets should be free; it’s whether we’re willing to call slavery “trade”. Can we honestly claim to be moral beings and support free markets while building our prosperity off of enslaved people?
Tariffs are bad on a national and global scale, but the use case for China is there- we cannot in good conscience do business with them. We can trade freely with free people, or stop pretending commerce built on concentration camps has anything to do with free markets.