Richard Martin: U.S. aluminum tariffs generate hidden costs and massive dislocations

Austrian economist Richard Martin argues tariffs are rarely successful in achieving their stated aims.

Instead, they generate unseen but profound costs, hidden disruptions, and massive economic dislocations.

The cornerstone of Austrian capital theory is that capital is heterogeneous—highly specific and tailored for particular tasks.

Building a new primary aluminum smelter takes at least 8 to 10 years and requires enormous upfront capital investments.

Economic strength and resilience come from allowing heterogeneous capital to flow naturally into its most productive uses, not from forced reallocations through tariffs.

Tariffs, rather than strengthening domestic production, may inadvertently weaken it, burdening the economy with hidden costs for decades into the future.

Policymakers would be wise to heed the warnings from Johnson ’s insights and the timeless lessons of Austrian economics.