Trump Is Helping to Protect the Tourism Industries of Foreign Countries
Here’s a letter of mine that’s just been published in the Washington Post.
The Trump administration announced that the prices it will charge foreigners to enter U.S. national parks will be higher than the prices charged to Americans, as was reported in the Nov. 28 news article “‘America-first’ upcharges to be levied on foreign visitors at national parks.” This plan is a continuation of the administration’s incoherent trade policy.
Foreigners who visit U.S. national parks are purchasing an American export: American tourism services. If foreign governments wanted to protect their own tourist industries from American competition, among the tools at their disposal would be tariffs on their citizens’ purchases of tickets to U.S. parks. This protectionist practice, which would indeed reduce foreign demand for an important American export, is one that President Donald Trump would probably denounce with cries of “ripping us off.”
And yet the Trump administration’s higher park fees for foreigners are economically very similar to foreign tariffs on an American export. With these higher park fees, Trump saves foreign governments from the bother of imposing tariffs to protect their tourist industries; he himself is protecting other countries’ tourist industries from American competition.
Donald J. Boudreaux, Fairfax
As I noted last week in this related post, there might nevertheless be a sound case for charging foreigners higher fees than are charged to Americans for admission to U.S. National Parks. That case would rest on the ability of price discrimination to yield more revenue than would be yielded by non-discriminatory pricing. In effect, the higher fees charged to foreigners would be revenue tariff on exports. Still, even revenue tariffs work protective effects, even if these effects aren’t their motivation. And the parties protected here are foreign suppliers of leisure and hospitality.
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