A New Golden Age for Bootleggers

David Frum: “President Donald Trump’s high-tariff regime will impose higher prices and lower growth on Americans. It will have another effect that nobody in the administration seems to have considered at all: a tsunami of smuggling.”

“In a few days’ time, every desirable consumer good will be dramatically more expensive in the United States than on world markets. Flat-screen TVs, athletic shoes, video-game equipment, even household basics such as coffee, toilet paper, and soy sauce—all will soon cost 20, 25, 35 percent more than they cost on world markets.”

“Trump has just opened perhaps the greatest arbitrage opportunity in the history of world trade. His effort to repeat the Smoot-Hawley tariffs of the 1930s will also replicate the cross-border bootlegging of alcohol during Prohibition.”