Milton Friedman Disproved Trump’s Argument for Tariffs Decades Ago
Commerce Secretary Howard Lutnick appeared before the House Appropriations Committee on Thursday, fielding questions about the current presidential administration’s trade strategy.
Rep. Madeleine Dean (D–Penn.) pressed Lutnick about President Donald Trump’s “chaotic tariff policy.” She held up a banana, imports of which are currently taxed at 10 percent. “Walmart has already increased the cost of bananas by 8 percent,” she noted.
“There is no uncertainty that if you build in America, and you produce your product in America, there will be no tariff,” Lutnick said. “The concept of building in America and paying no tariffs is very, very clear.”
“We cannot build bananas in America,” Dean retorted.
Dean is not quite right: We can grow bananas in the U.S., just not very well or very cheaply. In 2023, the U.S. imported over 5 million metric tonnes of bananas, totaling over $2 billion, while only producing about 3,500 metric tonnes.
The reason is that bananas only grow in tropical and subtropical climates: While Hawaii and Florida produce some, the majority of the world’s bananas come from Southeast Asia and Latin America.
While the U.S. could increase its production of bananas, we would be fools to do so: In all but a few locations, we would have to build greenhouses to simulate the tropical climates required. Even then, the trees would take longer to produce than they would in the tropics, and it could take years or even decades to reach the level of production necessary to replace the cur
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