National Tax­payers Union. Wiki Commons.

Hillsdale College eco­nomics pro­fessors are among the most recent to warn Pres­ident Donald Trump and Con­gress against passing tariffs on steel and alu­minum.

Along with 12 Nobel lau­reates and hun­dreds other econ­o­mists across the country, at least five Hillsdale pro­fessors signed the con­ser­v­ative advocacy orga­ni­zation National Tax­payers Union’s open letter urging the federal gov­ernment against pro­tec­tionist mea­sures of with­drawing from free trade agree­ments and levying tariffs on steel and alu­minum.

A letter signed by 1,028 econ­o­mists in 1930 against the Smoot-Hawley Tariff Act, which econ­o­mists agree exac­er­bated the Great Depression, inspired NTU to begin its efforts and submit its letter that it hopes will have even more sig­na­tures than the original memo had. It plans to submit its letter on May 3 to com­mem­orate the Smoot-Hawley letter’s 88th anniversary.

“Con­gress did not take econ­o­mists’ advice in 1930, and Amer­icans across the country paid the price [during the Great Depression],” NTU’s letter reads. “…Much has changed since 1930 — for example, trade is now sig­nif­i­cantly more important to our economy — but the fun­da­mental eco­nomics prin­ciples as explained at the time have not.”

Trump has said he is looking to implement a 25 percent tax on imported steel and 10 percent duty on imported alu­minum with a par­ticular focus on bal­ancing trade with China. The Smoot-Hawley Tariff Act raised taxes on more than 20,000 goods and was the second highest tariff in U.S. history. The U.S. Senate passed it by a margin of two votes.

Eco­nomics pro­fessors Michael Clark, Christopher Martin, Ivan Pon­gracic, Charles Steele, and Gary Wolfram said they have signed the letter. While the econ­o­mists said free trade is one issue on which a majority of econ­o­mists can agree, they said they are pes­simistic that politi­cians in Wash­ington, D.C., will heed their rec­om­men­da­tions.

“Do politi­cians care? No, I don’t think so,” Pon­gracic said. “That doesn’t mean it’s not worth­while. It’s important to have a public statement to stand up for these things.”

The letter cites at length from the Smoot-Hawley letter. In 1930, numerous influ­ential econ­o­mists signed the letter, which Steele said was “unprece­dented” at the time.

“History tells us, ‘No, the letter wasn’t effective,’” Steele said. “They ignored what these guys said. I think it is important to go on the record and say, ‘We told you so.’ If the tariffs come into play, I’m quite sure it will be bad for the American economy and bad for Amer­icans.”

Wolfram, the eco­nomic department chairman, agreed, noting that while the tariffs will be ben­e­ficial for steel and alu­minum pro­ducers in the United States, com­panies that use those metals in their products will face higher costs. Ulti­mately, he said, that will hurt American con­sumers, because prices will increase.

The pro­fessors said calls for tariffs often come from special interests looking to score an advantage in the mar­ket­place and from those who mis­un­der­stand trade deficits.

The United States has a trade deficit, which means it imports more than it exports. Wolfram, however, said this can be a good thing, because it means for­eigners want to invest in the American economy.

“We tend to think of trade deficits as a bad thing, but a capital surplus — that’s a good thing,” he said. “They’re the same thing. If we are the country where people want to invest, buy bonds, then we have a booming economy.”

Wolfram, who has written against the pro­posed tariffs in The Detroit News and Investor’s Business Daily, said he signed the letter because he thinks it will gain some noto­riety and foster dis­cussion on the levies and the Smoot-Hawley tariffs.

“Friedrich Hayek in his ‘Con­sti­tu­tional Liberty’ said one of the ben­efits of democracy is that debating over the issues will advance the state of knowledge,” Wolfram said. “If we have a debate over tariffs, the state of knowledge will be greater.”