The article discusses the unintended consequences of President Trump's tariffs, predicting that they will raise consumer good prices significantly in the U.S. This price disparity will create a prime opportunity for smuggling, similar to historical precedents like Prohibition. With tariffs making everyday items considerably more expensive, Americans will likely turn to black markets to find cheaper alternatives. The article emphasizes the challenges of enforcement, as current resources are inadequate to manage the anticipated surge in smuggling, risking the undermining of legitimate businesses and tax revenues.
Trump’s high-tariff regime will impose higher prices and lower growth on Americans. It will have another effect that nobody seems to have considered at all: a tsunami of smuggling.
His effort to repeat the Smoot-Hawley tariffs of the 1930s will also replicate the cross-border bootlegging of alcohol during Prohibition.
Trump has just opened perhaps the greatest arbitrage opportunity in the history of world trade. Goods will flow to American black markets.
Not even the most fervent MAGA supporter will think it harmful to bargain-shop for free-trade underwear out of the back of a truck driven from Mexico or Canada.
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