Reyna: We can’t wall off the global economy and expect capital markets to stay steady

Milton Friedman, one of the most influential economists of our time, famously said, “A tariff is a tax on consumers.” In Free to Choose, he championed the virtues of the free enterprise system—a system built on innovation, competition, and individual choice, not government interference. In his view, tariffs were antithetical to everything the system stands for.

The United States rose to global economic leadership not by shielding outdated industries, but by embracing open markets and entrepreneurial energy. I still remember President Reagan standing before the Berlin Wall and declaring, “Mr. Gorbachev, tear down this wall.” That moment wasn’t just a call for political liberty—it was a global endorsement of economic freedom. He was urging the world to reject the stagnation of central planning and embrace capitalism, choice, and competition.

Tariffs are a step backward. They artificially sustain industries whose goods and services often no longer meet global demand. If consumers aren’t buying, propping those products up behind trade barriers doesn’t fix the issue—it just delays the inevitable and forces American families to pay more.

I used to mock the absurdities of the Soviet system—like paying taxi drivers based on distance, not service, or offering one type of clothing regardless of demand. (See the classic Wendy’s Soviet Fashion Show ad from 1985.) These were the consequences of ignoring market signals. Tariffs may not be full-blown central planning, but they distort market logic and nudge us dangerously close to the inefficiencies we once ridiculed. I still remember a paper I wrote in my university comparative economics class titled, Communism Sows the Seeds of Its Own Destruction. Eight years later, the Soviet Union collapsed. I’ve always believed in our economic system, but I don’t believe in the way it’s being managed right now.

I want to be clear: Tariffs have limited and legitimate uses: protecting national security, nurturing truly emerging industries, or responding to unfair trade practices. Some countries do this well. But those are exceptions, not a blank check for widespread protectionism. We can’t wall off the global economy and expect capital markets to stay steady. Investors don’t gamble on uncertainty—they bet on stability and vision.

We don’t need to revive broom manufacturing in America just because we can. If someone else can make brooms better and cheaper, let them. Our focus should be on preparing Americans for tomorrow’s jobs, not subsidizing yesterday’s industries.

Even Adam Smith, in The Wealth of Nations, warned against tariffs. He knew they undercut market efficiency. If he saw today’s trend toward protectionism, he’d probably be shaking his head—or turning in his grave.

The free market made America great; if we let it work, it will strengthen us. Now is not the time to abandon that principle.

Editor’s Note: The above guest column was penned by Mario Reyna, a retired educator and member of the Rio Grande Valley Prosperity Task Force. The column appears in the Rio Grande Guardian International News Service with the permission of the author.

The post Reyna: We can’t wall off the global economy and expect capital markets to stay steady appeared first on Rio Grande Guardian.