To make America great again, we need to recreate the free-market environment that made her great in the first place. It’s not just oppressive direct taxes that must go. It’s all the regulations that have driven up the cost of doing business, and labor laws that make employing workers so expensive and risky that business does all it can to create as few jobs as possible.

But contrary to Trump’s stump speeches, our trading partners are not taking advantage of us; we are taking advantage of them. They give us their products and we give them nothing but our debt. They expend scare resources (land, labor and capital) to create consumer products for us to enjoy, while we just conjure intrinsically worthless dollars out of thin air. But years of excessive regulation and taxation have resulted in an accumulation of trade deficits that has transformed America from the world’s largest creditor to its largest debtor. Our once mighty savings financed a high-wage industrial economy that has been hollowed out, replaced by a weak, debt-financed, low-wage service sector economy.

Trump is right. This is a big problem and it needs big solutions. If tariffs were offered as a replacement to our ridiculous and destructive personal and corporate tax, and payroll and estate taxes, then America may become more competitive and our greater efficiency may even allow us to overcome the tariffs that other countries would likely impose on us in response. But slapping tariffs on imports, while doing nothing to improve the conditions for business efficiency, simply means that prices for American consumers will rise significantly, without sparking a revitalization of American manufacturing prowess. Don’t forget the global market contains over 7 billion consumers, the U.S. market just under 320 million. Insulating our manufacturers from this larger marketplace guarantees that we will never become globally competitive.

Tariffs or sales taxes will drive up the cost of goods for consumers, a fact that Trump seems to ignore. If he would acknowledge this issue, he could offer the counter argument that if we could couple tariffs with income tax relief that Americans would also have higher incomes to pay those higher prices. But even if incomes rise, higher prices will inevitably lead to less consumption and more savings, especially if we allow interest rates to be set by the free market rather than the Federal Reserve. More savings and less spending is exactly what we need if we want the capital to rebuild our industry. Protective tariffs alone will not work, especially when there is little industry left to protect.