JOINING ME IN THE CENTER RING TO "RIFF ON TARIFFS" IS SYRACUSE UNIVERSITY HISTORY PROFESSOR, DR. ANDREW WENDER COHEN.

WELCOME PROFESSOR.

>> I HAD, JOHN.

>> THANKS FOR COMING ON THE SHOW.

WE APPRECIATE IT.

LET'S GET RIGHT AT IT.

I GOT TO WONDER WHAT TRUMP AND HIS ADMINISTRATION IS CONTEMPLATING WITH TARIFFS.

THE QUESTION IS, IS IT LEGAL?

>> WELL, IT MAY NOT BE LEGAL.

HISTORICALLY, THE POWER TO CREATE TARIFFS RESTED WITH THE UNITED STATES CONGRESS.

BUT WE SAW THAT DURING THE NEW DEAL PERIOD, THAT BEGAN SHIFTING.

CONGRESS DELEGATED THAT POWER TO THE PRESIDENT.

THAT SAID, THE POWER RESTED WITH THE PRESIDENT TO NEGOTIATE AGREEMENTS.

IT DIDN'T NECESSARILY REST WITH HIM TO BE ABLE TO INSTITUTE TARIFFS ON A DAY-TO-DAY BASIS THE WAY HE IS NOW.

>> OKAY.

SO IT REMAINS AN OPEN QUESTION HOW FAR WILL HE GO BUT LIKE OTHER THINGS, IS IT LIKELY THESE WILL BE TESTED IN THE COURTS?

>> ABSOLUTELY IT WILL BE TESTED IN THE COURTS.

THE REALITY IS THAT THERE ARE A WHOLE RANGE OF DIFFERENT THINGS THAT THE TRUMP ADMINISTRATION IS DOING THAT MAY NOT BE CONSISTENT WITH THE CONSTITUTIONAL LIST OF POWERS.

WHICH POWERS REST WITH THE UNITED STATES CONGRESS.

WHICH REST WITH THE EXECUTIVE, ET CETERA.

>> SO WE SPOKE AT THE BEGINNING OF THE SHOW ABOUT HOW MUCH TARIFFS PLAYED A PART IN THE EARLY PART OF OUR COUNTRY.

90% TARIFF RATE.

AND NOW IT'S ABOUT 2%.

HOW DID THAT HAPPEN?

HOW DID THAT COME ABOUT?

>> WELL, IN THE EARLY PERIOD, THE UNITED STATES WAS TRYING TO DEVELOP MANUFACTURING.

THEY WERE SEPARATING THEMSELVES FROM THE MOTHER COUNTRY, ENGLAND.

MOREOVER, IT WAS THE ONLY WAY FOR THEM TO RAISE REVENUE WAS THROUGH IMPORT DUTIES AND BY THINGS LIKE TOBACCO AND ALCOHOL.

SO FOR MOST OF THE 19th CENTURY, REVENUE WAS GENERATED BY THESE KINDS OF DUTIES.

WE BEGIN SEEING THAT IN THE CIVIL WAR PERIOD, THE UNITED STATES NEEDS A MUCH LARGER GOVERNMENT.

EARLY AMERICA DIDN'T EVEN HAVE A NAVY.

SO ONCE YOU HAVE MORE DEMAND FOR REVENUE, YOU BEGIN SEEING THEM EXPERIMENTING WITH THINGS LIKE AN INCOME TAX, WHICH IS MUCH BETTER AT RAISING REVENUE.

MOREOVER, BY THE 20th CENTURY, THE UNITED STATES HAS MUCH MORE DEVELOPED INDUSTRY AND THERE IS A SENSE THAT WE DON'T NEED TO HAVE PROTECTIVE TARIFFS TO TRY AND SHIELD AMERICAN INDUSTRIES FROM FOREIGN COMPETITION.

>> ALL RIGHT.

SO WHAT WOULD THE REASONS, OVER TIME, THAT THE TARIFFS WERE USED?

YOU MENTIONED SOME OF THEM.

OBVIOUSLY FOR OR TO DEVELOP MANUFACTURING.

WHAT WERE SOME OF THE OTHER REASONS TARIFFS WERE IMPOSED?

>> WELL, THERE WERE A WHOLE RANGE OF REASONS.

SOME OF THE REASONS HAD TO DO WITH PROMOTING MANUFACTURING, PROTECTING WHAT WERE CALLED INFANT INDUSTRIES.

IN SOME CASES, IN THE BIGGEST CASE, IT WAS USED TO RAISE REVENUE FOR THE UNITED STATES FEDERAL GOVERNMENT.

IT WAS THE MAIN SOURCE OF REVENUE UNTIL THE CIVIL WAR.

BUT THERE IS ALSO A MORAL ISSUE.

SOMETIMES THEY WOULD IMPOSE HIGH TARIFFS ON THINGS LIKE OPIUM OR ON ALCOHOL OR TOBACCO BECAUSE THESE WERE THINGS THAT WERE FROWNED UPON.

THEY DIDN'T ABOLISH THOSE THINGS IN THE UNITED STATES IN THE 19th CENTURY, BUT THEY DID PUT VERY HIGH TARIFFS, 100% TARIFFS ON THINGS LIKE OPIUM.

>> SO WHAT DO YOU THINK THE GOAL OF THE ADMINISTRATION IS NOW?

IT SEEMS LIKE THERE IS A FOREIGN POLICY COMPONENT, THERE IS AN ECONOMIC COMPONENT.

AND MAYBE SOME OTHER COMPONENTS.

WHY DON'T YOU TELL US, BASED ON WHAT YOU HAVE SEEN OF THE TRUMP ADMINISTRATION'S GOALS, WHAT IT IS HE IS TRYING TO ACCOMPLISH?

>> WELL, I THINK THERE IS A POLITICAL COMPONENT, WHICH IS THAT HE WANTS TO PROJECT NATIONALISM AGAINST GLOBALISM.

TRUMP BELIEVES THAT THE UNITED STATES IS GETTING CHEATED BY ITS ALLIES AND HE REALLY DOESN'T BELIEVE IN THE IDEA OF A WIN-WIN AGREEMENT.

AND SO HE WANTS OUR ALLIES TO COME AND BEND THE KNEE AND MAKE CONCESSIONS.

HE WANTS TO PROJECT STRENGTH AND USE TARIFFS TO DO THAT.

BUT THERE IS ALSO THE POLICY ANGLE.

HE WOULD LIKE THE UNITED STATES TO DEVELOP MORE MANUFACTURING, TO DRAW INTERNATIONAL INVESTMENT.

AND HE SEES TARIFFS AS A TOOL FOR THAT.

HE WOULD LIKE THE UNITED STATES TO BEGIN REPLACING THE INCOME TAX WITH TARIFFS AS A SOURCE OF REVENUE.

THAT'S VERY DIFFICULT BECAUSE TARIFFS REALLY CAN'T GENERATE THAT MUCH REVENUE.

THE REVENUE WE NEED TO RUN THE GOVERNMENT.

AND THIRD, I SUPPOSE HE PROBABLY WANTS TO ANNEX CANADA SINCE HE HAS SAID IT MANY TILES.

NOW SCHOLARS WILL TELL YOU NONE OF THOSE THINGS ARE LIKELY TO HAPPEN.

WE ARE NOT GOING TO DRAW BACK MANUFACTURING NECESSARILY.

WE AREN'T GOING TO ANNEX CANADA.

WE ARE NOT GOING TO BE ABLE TO REPLACE THE INCOME TAX BUT HE IS THE PRESIDENT AND WE ARE NOT.

>> SO IF THE GOAL IS TO PROTECT U.S. INDUSTRY AS PART OF THIS PROGRAM, IS THIS THE BEST WAY TO DO IT IS TO HAVE TARIFFS FROM OTHER COUNTRIES TO INCENTIVIZE MANUFACTURING TO COME BACK HOME?

>> I SORT OF BELIEVE THAT THE BETTER WAY IS TO HAVE TARGETED SUBSIDIES OF THE TYPE THAT THE BIDEN ADMINISTRATION SPONSORED, THE CHIPS ACT, THAT MEANT THAT YOU WERE FOCUSING ON SPECIFIC INDUSTRIES THAT YOU WANTED TO DEVELOP THAT WERE ESSENTIAL FOR THE SUPPLY CHAIN, ESSENTIAL FOR MILITARY.

WHAT TRUMP IS DOING IS MUCH MORE BRUTE FORCE, MUCH MORE BLUNT AND MUCH MORE PERSONAL.

AGAIN, THE KEY IS TO DO THINGS IN A SYSTEMATIC PREDICTABLE FASHION.

THE PROBLEM WITH THE TRUMP ADMINISTRATION IS THAT IT IS ALL ABOUT TRUMP.

IT'S ALL ABOUT HIS DECISIONS AND WHO IS NAUGHTY AND WHO IS NICE ON ANY GIVEN DAY.

AND SO IT HAS BECOME VERY DIFFICULT FOR THE MARKET TO PREDICT WHETHER OR NOT TARIFFS ARE GOING TO BE HIGH OR LOW IN SIX MONTHS AND THAT HAS MADE IT VERY DIFFICULT FOR THEM TO DO BUSINESS PLANNING.

SO IF YOU WERE A BUILDING CONTRACTOR, YOU WOULD FIND IT VERY DIFFICULT TO PROJECT THE COST OF YOUR FUTURE CONSTRUCTION BECAUSE YOU WOULDN'T KNOW THE COST OF CANADIAN LUMBER.

>> SO LET'S TAKE RECIPROCAL TARIFFS, WHICH ARE DUE TO GO INTO EFFECT APRIL 2 AND THAT IS IF YOU ARE TAXING OUR PRODUCT, WE ARE GOING TO TAX YOUR PRODUCT WITH A TARIFF MUCH SO ISN'T THAT JUST LEVELING THE PLAYING FIELD?

ISN'T THAT A SENSE OF FAIRNESS?

THE WAY TO THINK OF IT IS THE AGREEMENTS THAT BIND THE UNITED STATES WITH REGARD TO TRADE WERE NEGOTIATED.

THAT MEANS THAT IN ORDER FOR THE UNITED STATES TO CONVINCE SOME COUNTRY TO LOWER THEIR TARIFF BARRIERS, THE UNITED STATES HAD TO GO INTO A NEGOTIATION AND THEY MAY NOT HAVE BEEN ABLE TO GET TO PARITY.

AND TRUMP MAY NOT BE ABLE TO GET TO PARITY.

COUNTRIES MAY SAY WELL WE JUST WON'T ACCEPT THAT.

THAT IS NOT GOOD FOR US.

WE ARE NOT IN THE SAME POSITION YOU ARE IN.

SO, YES, ON SOME LEVEL IT'S ABOUT FAIRNESS.

BUT ON ANOTHER LEVEL IT'S ABOUT WHAT CAN YOU ACTUALLY GET IN A NEGOTIATION.

WHAT CAN YOU-- WHAT KIND OF AGREEMENT CAN YOU HAMMER OUT?

AND WHAT THIS MAY RESULT IN IS A LOT OF ENEMIES ABROAD, PEOPLE WHO ARE NO LONGER TRADING WITH THE U.S., NO LONGER SEE THE UNITED STATES AS HAVING COMMON INTERESTS.

>> THANK YOU, Dr. COHEN.

>> THANK YOU.