You probably don't think much about tin cans, even when you're buying one. It's the product inside the can—soup, beans, maybe hairspray or sunscreen—that seems to matter.

But the humble tin can is both a crucial component of modern, globe-spanning supply chains and a product of them: About half of the metal used to make tin cans in the U.S. is imported from abroad. And that's why tin cans—more specifically, tinplate steel, the type of metal used to make those cans—are at the center of a behind-the-scenes fight over tariffs that illustrates so many of the problems with protectionist policies.

On one side of that fight is Cleveland-Cliffs, one of just two companies in the U.S. that produces tinplate steel. In a recent petition to the Commerce Department, Cleveland-Cliffs asked for tariffs of up to 300 percent against imported tinplate steel—the products that account for over half of the supply of tinplate in the American economy.

Those tariffs will translate into reduced supply and higher prices, says Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association.

"When the tariffs go into effect, they raise the cost of steel, they raise the cost of the packaging," says Madrecki. The can itself is often the most expensive element of a canned food item, so those prices quickly cause the overall price tag to rise. "You [will] see food prices go up 19 to 30 percent. That translates to 36 to 58 cents per can," he says.

And while new tariffs might protect some tinplate-making jobs at Cleveland-Cliffs, research suggests the higher prices will cause far greater losses throughout the rest of the economy. The Trade Partnership, a think tank, estimates that the proposed tariffs could cause up to 40,000 jobs to be lost in downstream industries, including blue-collar jobs like can-making and food production. If the steel in their tin cans is suddenly more expensive, food production companies might simply purchase finished—and less-highly-tariffed—cans overseas.

"You're going to go to the grocery store one day…and you're going to look at the receipt in disbelief and say, 'How did this happen?'" says Gerard Scimeca, chairman of Consumer Action for a Strong Economy, a free market group that opposes the tariff proposal. "Well, this is how that happened: You had a company trying to take advantage of our trade policy for personal gain."

And here's the real kicker: As a rule, the Department of Commerce doesn't even consider the potential (and often obvious) consequences of these decisions. The tariff petition process is one-sided and skewed heavily in favor of companies seeking protectionism at the expense of consumers and workers throughout the economy.

Government policy, no surprise, is one of the big reasons why we can't have nice things.

Further reading for this week's episode:

"Biden Administration Considering New Tariffs That Will Hike Prices for Canned Goods," by Eric Boehm, Reason.

"U.S. Plans New Tariffs on Food-Can Metal From China, Germany, and Canada," by Yuka Hayashi, The Wall Street Journal

"Tinplate Steel Tariffs Will Harm American Consumers and Manufacturing Jobs," by the Consumer Brands Association

"Four Areas for Congress To Exercise Trade Policy Oversight," by Tori Smith, American Action Forum

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact-checking by Katherine Sypher.

The post <em>Why We Can't Have Nice Things</em>: Can You Afford Tariffs on Tin Cans? appeared first on Reason.com.

The brief trade war between the U.S. and Europe in the early 1960s might seem hardly worth remembering—and it pales in comparison to the political and cultural upheaval that defined that decade.

But any American who has bought a pickup truck in the past 50 years has been collateral damage in that conflict—a conflict that started because European farmers were mad about American exports of frozen chicken.

The 25 percent retaliatory tariffs that President Lyndon B. Johnson set on imported light trucks have fenced off the American pickup truck market from foreign competitors for decades. As a result of the so-called chicken tax, consumers pay higher prices, and a handful of brands have become dominant in the marketplace. The other tariffs that were part of that long-ago trade war have been repealed. This one remains.

"There are a few people highly invested in keeping it around and no one really cares to get rid of it," explains Jordan Golson, a freelance automotive journalist. When it comes to tariffs, he says, "It's not easy to make one of these rules, but it's a thousand times harder to get rid of one."

On this week's show, Golson also discusses the lengths that some foreign truck-makers have gone to in order to avoid those tariffs. That includes the story of the Subaru BRAT: a small pickup truck that was imported to America with seats installed in the truck bed—so it would be classified as a passenger vehicle rather than a cargo vehicle and, thus, exempt from the 25 percent import tax.

Daniel Griswold, an adjunct scholar at the Cato Institute, reminds us that the chicken tax has caused real economic harm in addition to those funny, creative attempts at tariff dodging.

"The U.S. government is artificially constricting competition in that market, and that means higher prices, it means less choice," Griswold says.

Automobiles can be imported to the U.S. with tariffs of just 2.5 percent, and the result has been a far more robust market for consumers and greater foreign investment in making cars in the U.S.—something that hasn't happened in the truck market due to the trade barriers.

The chicken tax has been "a losing proposition all around for Americans, consumers, and the American economy," says Griswold. It's also a great example of how tariffs can stifle, rather than protect, domestic markets.

Further reading for this week's episode:

"Cheap American Chicken Gave Us This Weird Subaru Pickup," by Golson, Wired

"Why Are Pickups So Expensive? Blame the Chicken Tax," by Griswold, Cato Institute

"How a Tax on Chicken Changed the Playing Field for U.S. Automakers," by Sonari Glinton, NPR

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher

The post <em>Why We Can't Have Nice Things</em>: The 'Chicken Tax' That Makes Pickup Trucks More Expensive appeared first on Reason.com.

Arkansas has some of the strangest liquor laws in the country—or at least the most politically contentious.

Unlike a lot of other places, the state allows counties to hold referendums to decide whether they will allow the retail sale of alcohol. That is, whether they will be "wet" or "dry." And when those elections take place, it's often existing liquor stores—the very businesses that earn money by selling booze—that campaign the hardest to keep county-level prohibition going.

And they often have a powerful, but unexpected ally: churches.

In the fourth episode of Why We Can't Have Nice Things, a new podcast series from Reason, we take a deep dive into the political dynamics that drive Arkansas' local alcohol legalization elections. Jeremy Horpedahl, an economist at the University of Central Arkansas, says public choice theory explains why special interests that might have very little in common sometimes team up to push protectionist regulations.

"What's especially powerful about this coalition is that you have the liquor stores which can provide the money to prevent legalization of alcohol sales," he says, "and the churches, which can provide the moral argument the public face of the campaign to keep these things, keep the rules, how they are."

Chris Swonger, CEO of the Distilled Spirits Council of the United States, says that arguments about morality are often used as cover when one faction or another wants regulations to boost their own competitive interests.

Once you know what to look for, there are "bootleggers" and "baptists" to be found just about everywhere.

Further reading for this week's episode:

"Bootleggers and Baptists: The Education of a Regulatory Economist," by Bruce Yandle

"Bootleggers, Baptists, and Ballots: Coalitions in Arkansas' Alcohol-Legalization Elections," by Jeremy Horpedahl

Check out the full range of the "Bootleggers and Baptists" phenomenon at Reason.com.

Find out which states allow spirits to be shipped directly to consumers' homes at ShipMySpirits.org, a project of the Distilled Spirits Council of the United States.

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher

The post <em>Why We Can't Have Nice Things</em>: Bootleggers, Baptists, and Ballots appeared first on Reason.com.

From his second-floor office overlooking the harbor in Norwalk, Connecticut, Bob Kunkel can see Long Island looming over the horizon to the south.

It's only about 10 miles away, straight across the blue waters of the Long Island Sound. But shipping anything from Connecticut to Long Island—or back again—likely means loading a truck, sending it down Interstate 95 toward New York City, passing through some of the most congested highways in the whole country, and eventually meandering toward the final destination.

Kunkel, president of Alternative Marine Technologies, a design and construction supervision firm, says there ought to be a better way. This part of the country was built because Americans used to ship a lot of cargo by water—and he'd like to start doing that again.

"One Connecticut governor told everybody I-95 was a parking lot," he says. "So what are we doing to fix it? You're not going to build another highway. I mean, the costs are phenomenal."

Unfortunately, the costs to ship anything by water in the United States are phenomenal too, thanks to a federal law from 1920 that severely limits the number of cargo vessels operating here. The Jones Act requires that ships moving goods from one American port to another must be American-built, American-flagged, American-crewed, and registered in the United States.

That's a major stumbling block for Kunkel's plan to ease truck traffic along the I-95 corridor in Connecticut. He'd like to buy four mid-sized cargo vessels—big enough to fit more than 80 tractor-trailers but far smaller than the massive container ships built to cross oceans—to move goods from New Jersey to Long Island, bypassing the bottleneck of New York City.

A boat like that costs about $65 million on the international market, he says. But to get one that complies with the Jones Act will cost $125 million, or more.

"So now the numbers don't work," Kunkel tells Reason. "If we can't compete with trucking or support trucking, then there's no sense building the ship."

In the third episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're looking at just some of the ways that the Jones Act drives up prices, makes it more difficult to ship goods to places like Puerto Rico and Hawaii, and snarls supply chains for American industries.

"It's just a very classic case of everything wrong with Washington," says Colin Grabow, a research fellow at the Cato Institute.

Further reading for this week's episode:

The Case Against the Jones Act, by Colin Grabow and Inu Manak

"How a Century-old Law Contributes to CT Traffic," by Jordan Nathaniel Fenster, CT Insider

"Building a Maritime Highway Across the Long Island Sound," by Ira Breskin, The New York Times

"The Obscure Maritime Law That Ruins Your Commute," by Scott Lincicome, The Atlantic

"Protectionist Policies Set To Inflate the Cost of Rebuilding Hawaii," by Colin Grabow

The post <em>Why We Can't Have Nice Things</em>: Jones Act Traffic Jam appeared first on Reason.com.

It's now been nearly 100 years since Congress overhauled the United States' general tariff system—a system that is by now "quite antiquated and designed for a different time and a different economy," says Ed Gresser.

And that's not all, says Gresser, a former assistant U.S. trade representative who now serves as vice president for the Progressive Policy Institute, a left-of-center think tank. The tariff code is also "quite regressive and somewhat misogynist." Inexpensive goods like cheap sneakers are generally taxed at a higher rate than pricier items like leather boots, and women's underwear is charged a higher tariff rate than boxers and briefs.

In the second episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the weird and wonky tariff system that imposes hidden taxes on Americans every day. Protectionism usually benefits some special interest at the expense of everyone else, but some of the industries supposedly being protected by these tariffs don't even exist in the U.S. anymore.

"The most effective lobbyist in Washington is muscle memory," says Steve Lamar, president and CEO of the American Apparel and Footwear Association.

The supply chains for basic necessities like T-shirts, shoes, and underwear stretch all the way around the world today. But America's tariff code still acts like those are niche domestic industries. On this week's episode of Why We Can't Have Nice Things, we're explaining what that means for consumers and why we've recently moved in the wrong direction—by applying even more tariffs on top of some of the most highly taxed imports.

Further reading for this week's episode:

"U.S. Underwear Tariffs Are Unfair to Women," by Ed Gresser

"U.S. Tariffs on Cheap Stainless Steel Spoons Are 5 Times Higher Than on Sterling Silver Spoons," by Ed Gresser

"The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade," by Pietra Rivoli

"If Biden's Trade Policy Was Really Driven by 'Equity,' Trump's Tariffs Would Already Be Gone," by Eric Boehm

The post <em>Why We Can't Have Nice Things</em>: The Ghosts of Protectionism Past appeared first on Reason.com.

"When you walk into the store and there you don't see that packaging…you start to panic," says Kenzie Jaicomo, a new mom whose child was just a few months old when a sudden shortage of baby formula hit the United States last year.

"What am I going to feed my baby?" she remembers thinking, staring at an empty shelf in a neighborhood grocery store.

In the first episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the causes and consequences of last year's baby formula shortage. Though it was a crisis kicked off by unexpected supply chain issues and contamination problems at a major production facility in Michigan, the roots of the shortage ran straight through Washington, D.C., where poor government policy left American infants hungry and their parents scrambling.

With domestic supply chains snarled, it would have made sense for American grocery stores to turn to foreign producers for replacement supplies of baby formula. Unfortunately, there are "absurdly high" tariffs on imported formula, explains Gabriella Beaumont-Smith, a trade policy analyst at the Cato Institute.

"There are these distribution channels that are basically not established" because the tariffs make it too costly, she says. "And we're talking about baby formula. This is a necessity and we shouldn't be taxing it that high or at all."

It took last year's crisis for Congress to consider lifting those tariffs—and only on a temporary basis. The dairy lobby and other special interests like the isolated, and fragile, American market for baby formula just the way it is.

On this week's episode of Why We Can't Have Nice Things, we'll explain how this crisis unfolded, why the government's efforts to alleviate the shortage mostly failed, and ask whether a free market might have done a better job. Spoiler alert: It would have.

Further reading/viewing for this week's episode:

"Formula for a Crisis," by Scott Lincicome, Beaumont‐​Smith, and Alfredo Carrillo Obregon

"My Baby Needed Special Formula From Europe. U.S. Trade Policy Made It Almost Unobtainable," by Kelli Pierce

"The Government Hasn't Learned a Thing From the Baby Formula Shortage," by Emma Camp

"FDA Finally Admits It Caused the Baby Formula Shortage," by Eric Boehm

"The Mystery of the Missing Baby Formula," by ReasonTV

The post <em>Why We Can't Have Nice Things</em>: The Great Baby Formula Shortage of 2022 appeared first on Reason.com.

Trade crossed with politics equals protectionism. That's the formula for Why We Can't Have Nice Things, a new limited-run podcast series from Reason launching on August 3.

Join host Eric Boehm over the next six weeks as he examines how markets could deliver the goods for consumers—if only the government didn't keep getting in the way.

The show will take a deep dive into some of the frustrating and foolish parts of American trade policy, including the 1960s trade war that artificially inflated the price of pickup trucks and the government policies that contributed to last year's worrying shortage of baby formula. These are stories about how special interests influence policy, and why all of us end up paying for it.

It's Why We Can't Have Nice Things. Check out the trailer for the new show, and click here to subscribe.

The post Trailer: <em>Why We Can't Have Nice Things</em> appeared first on Reason.com.