It takes a certain amount of well, something, to weaponize an agency and destroy morale and then ask for more money. That’s exactly what Federal Trade Commission (FTC) Chair Lina Khan did. Earlier this week, Khan asked appropriators for $535 million in funds for the next fiscal year. This represents a roughly 25 percent increase from their funding levels this year. If ever there was a federal agency that does not merit any funding increase, especially a 25 percent increase, it is the FTC. The last year for the agency has been marked by chaos, lawlessness, and a vindictive targeting of American companies, oftentimes in collusion with foreign regulators. In March of 2023, then-Commissioner Christine Wilson resigned in protest over the lack of transparency within the agency and cited how far the FTC had strayed from its mission to protect American consumers. The FTC operated with only three of its five commissioners for much of the time since. The FTC also lost a series of legal cases they
brought against American firms. In many cases, all indications point to Chair Khan knowing the lawsuits would fail but hoping that the process would strong-arm these companies into submission or that the defeats would prompt lawmakers to change existing law. The FTC is charged with enforcing existing law, not making new public policy. An increase in funding of this size would only contribute to this unsettling mission creep.

Terrible Tariffs

On May 14, U.S. Trade Representative Katherine Tai announced new tariffs levied against 14 new categories of Chinese imports. This marks another economically confused political victory for Washington’s flailing protectionists. Inconveniently for the administration’s new push for tariffs, nobody has rebutted the dubious economics of protectionism better than Joe Biden. Slamming the trade warfare of Donald Trump in 2019, Biden ridiculed the notion “tariffs are being paid by China.” As the then-candidate continued, “Any freshman econ student could tell you that the American people are paying his tariffs.” A few months later, Biden once again condemned Trump’s “irresponsible tariff war with China,” pledging to “reverse his senseless policies.” In office, however, Biden has proved as unfree a trader as his predecessor, subordinating his erstwhile clarity to aspirations for industrial policy and central planning. Tariffs, like any taxes, raise prices. Justification for this new batch stems p
rimarily from Biden’s disbelief in economic tradeoffs. The president aims to have his cake and ensure it’s made in America, too. The administration seeks a breakneck transition to electric vehicles (EVs) and solar power. But simultaneously, it will levy prohibitively high tariffs to bar foreign manufacturers from providing low-cost and consumer-friendly products that would speed that transition.

The Trump-initiated, and Biden-perpetuated, trade wars have largely failed to secure their objectives. Moreover, on net, they have damaged the American economy. Although purported by their advocates to target foreigners, tariffs primarily burden domestic consumers, who must pay tariff-inflated prices. Whatever its meager benefits to the targeted industries, protectionism does great harm to downstream industries and consumers. The Tax Foundation reports that “the Trump-Biden tariffs will reduce long-run GDP by 0.21 percent, wages by 0.14 percent, and employment by 166,000 full-time equivalent jobs.” In 2018, Trump introduced tariffs unilaterally under Section 301 of the Trade Act of 1974, the provision under which Biden now somewhat dubiously acts. “There is near-universal agreement that Section 301 tariffs failed to achieve their goals while costing U.S. taxpayers the equivalent of $1,700 per household and sparking Chinese retaliation against U.S. farmers and other exporters,” Bryan Riley,
director of the free trade initiative at the National Taxpayers Union Foundation, told Reason.

Biden’s just-announced tariffs aim specifically to promote the industries he has made central to his industrial policy, including semiconductors and clean-energy technologies. “Relative to Mr Trump’s China tariffs, the new levies are both more targeted and more dramatic,” the Economist notes. “Mr Trump’s tariffs in time sprawled to cover over $350bn-worth of imports from China, mostly at a 25% rate. Mr. Biden’s tariffs cover about $18bn-worth of imports, though at far more prohibitive rates.” Among other goods, the Biden administration will raise rates on EVs (from 25 percent to 100 percent), lithium-ion batteries and their components (from 7.5 percent to 25 percent), steel and aluminum (from 0–7.5 percent to 25 percent), semiconductors (from 25 percent to 50 percent), and solar cells (from 25 percent to 50 percent). The higher prices that will result from Biden’s new rates (e.g., the rates on batteries, for which America relies heavy on Chinese imports) will slow consumer adoption. Howev
er, drastic rate hikes on such products as Chinese EVs, which command one percent of the U.S. market, and Chinese steel, which comprised less than one percent of U.S. steel imports in early 2024, will likely trigger less substantial immediate changes.

Protectionism enjoys a seemingly bottomless emotional resonance in American politics. Facially inspiring speeches about saving American industry and workers from nefarious foreign actors garner politicians votes, media attention, and — not to be discounted — donations from interested firms seeking further trade barriers. Tariffs’ scant benefits accrue to small groups, fostering crony coalitions of self-interested supporters. Conversely, their far-greater harms, which fall diffusedly across the economy, produce comparatively little backlash. Biden and Trump have made clear their intention to unwind the hard-won system of free trade that undergirds modern American prosperity. No matter who “wins” the race to increase tariffs, American voters, consumers, and businesses will lose.

The Broken Idea of Right to Repair

The Colorado House of Representatives recently passed HB 1121, a proposal for “right to repair” legislation. The bill would force device manufacturers to make tools, documents, and parts available to third-party independent repair shops. HB 1121 would introduce various parts pairing prohibitions, which can inadvertently fuel black markets for spare parts, putting Coloradans at a higher risk of theft and other property crimes. The bill would heavily restrict manufacturers’ ability to use “parts pairing,” a software tool that manufacturers use to ensure that all the components of a device match the device’s serial number. By using parts pairing, manufacturers can ensure that any device repairer is using authorized, previously vetted parts that are known to work and that have been knowingly acquired from a legitimate source. Advocates for the legislation argue that parts pairing severely cripples repair shops’ business model because it doesn’t allow them to “harvest” parts—repurposing func
tioning parts from otherwise broken devices—for future repairs. These repurposed parts would not match the serial number of the serviced device, and parts pairing software would flag a part as non-genuine. This has motivated advocates of right to repair legislation to push for the inclusion of restrictions on parts pairing in legislation such as HB 1121.

Repair shops’ concerns about the effects on parts pairing on their business model is a legitimate one and the provision is well-intentioned. However, policymakers should consider the role parts pairing can have as a deterrent against spare parts black markets, which usually feed off stolen and counterfeited devices to build out their inventory. Software-side solutions have a proven track record of deterring crime. When major smartphone manufacturers introduced the “kill switch,” which locks stolen phones and makes them unusable, smartphone robberies saw a significant decrease after hitting an all-time high in 2013. Unfortunately, criminals have responded to the introduction of kill switches by stripping these phones and selling these parts, instead of the whole devices. These stolen parts can end up in unsuspecting repair shops in the U.S. or in black markets all around the world. Parts pairing aims to tackle this issue by devaluing these stolen parts, as the software would detect when a
device is using unauthorized parts. However, if this bill were to pass, these spare parts would regain their value on the black market and as these parts can now be used in unsanctioned repair work.

The bill’s impact would not be limited only to Colorado, but to the whole country. Thieves can ship small, portable electronics from all over the country. These stolen parts could end up flooding the domestic repair market or be shipped overseas for a premium. Legislators in Colorado should be wary of how this provision could lead to a nationwide surge in property theft, such as shoplifting, pickpocketing, and robbery. The introduction of a parts-pairing prohibition in this bill seems contradictory with other realities present in the state. HB 1121 restrict parts pairing for smartphones and consumers electronics, while other industries are moving in the opposite direction. For example, auto insurance companies and repair shops in Colorado rolled out a system that would help track catalytic converters, a car part that has seen a rise in theft due to its ease of access and high resale value. By using tear-resistant stickers, unique serial number identifiers, and chemical components, law
enforcement officers, repair shops, and salvagers are making sure the parts they are using come from a legitimate source. The drafters of the bill seem to recognize the value of this parts pairing effort, as they explicitly exempted motor vehicles (and a plethora of other technologies) from being covered by this bill. Repair shops and regulators pushing for a prohibition of parts pairing must understand the tradeoffs that are inherent to any policy. In this case, prohibiting parts pairing could cause more problems than it solves, as the practice acts as a significant deterrent for stolen parts black markets. As currently drafted, HB 1121, would make stolen parts more valuable for resale, providing ill-intentioned individuals more opportunities for profiting of property crime, as it happens with other goods such as automobiles. By prohibiting parts pairing, legislators could potentially make Coloradans a bigger target for crime.


BLOGS:

Monday: Consumer Watchdog Strongly Opposes Section 230 Repeal Proposal ([link removed])

Tuesday: Colorado’s Right to Repair Bill Might Spark a Rise in Phone Theft ([link removed])

Wednesday: Environmentalist Policies Hurt Consumers, and Consumers Are Noticing ([link removed])

Thursday: TPA Supports the Debt Per Taxpayer Information Act ([link removed]) and Taxpayers Say Neigh to Pimlico Plan Barn-doggle ([link removed])

Friday: The EPA’s Budget Request ([link removed])

Media:

May 12, 2024: I appeared on WBAL radio 1090 AM (Baltimore, Md,) to talk about the Credit Card Competition Act.

May 13, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me about nonprofit funding in Baltimore.

May 13, 2024: The Daily Pouch ran TPA’s op-ed, “Sunak’s capitulation on vaping illustrates how the UK government has descended into abject farce – Part One.”

May 14, 2024: The Washington Examiner (Washington, D.C.) quoted TPA in their story, “Here are the central pillars of MAGAnomics for a Trump second term.”

May 14, 2024: Law & Liberty ran TPA’s op-ed, “Nanny State Screen Rules?”

May 14, 2024: TPA was mentioned in a television segment titled "Investigative report questions NTSB reliance on FAA, calls out lack of on-site investigations ([link removed]) ,” which was aggregated by more than 40 local station affiliates including Toledo, OH, Tallahassee, Florida, and Wilmington, NC.

May 14, 2024: Tobaccoharmreduction..net ran TPA’s op-ed, “No Smoke, Less Harm: A Path to Saving Lives.”

May 15, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me about the Baltimore City primary.

May 15, 2024: Targeted News Service mentioned TPA in their article, “Congressman Blake Moore Introduces Bipartisan Legislation to Prevent the Waste, Fraud, and Abuse of Federal Funds.”

May 15, 2024: Florida Daily quoted me in their article, “Americans Oppose Government Funding Of National Public Radio.”

May 15, 2024: Real Clear Markets ran TPA’s op-ed, “The FTC's Non-Compete Ban Is a Total Non-Starter.”

May 15, 2024: Inside Sources ran TPA’s op-ed, “FCC’s Misguided Net Neutrality Quest Rears Its Ugly Head Again.”

May 15, 2024: Real Clear Energy ran TPA’s op-ed, “Electric Vehicle Subsidies as Complex and Costly as Ever.”

May 16, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me about the cost of tariffs.

May 16, 2024: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the IRS and tax reform.

May 16, 2024: Contentenginellc.com ([link removed]) mentioned TPA in their article, “Don’t Judge a Bill by its Title: How the Kids Online Safety Act Fails to Keep Kids Safe Online.”

May 16, 2024: Mendafn.com ([link removed]) mentioned TPA in their article, “WHO/FCTC Needs To Respect Science, Consumer Rights In COP Meeting - TPA.”

May 16, 2024: Patrick Hedger appeared on the Steve Gruber Show WJIM 1240 AM (Lansing, Michigan.) to discuss the Credit Card Competition Act and Social Security insolvency.

May 16, 2024: Townhall.com ([link removed]) ran TPA’s op-ed, “Biden Newest Protectionist Folly Will Raise Prices and Hurt Americans.”

May 16, 2024: Inside Sources ran TPA's op-ed, "U.S. Postal Service Asking for Another Taxpayer Bailout."

May 16, 2024: Zero Hedge ran TPA’s op-ed, “Electric Vehicle Subsidies as Complex and Costly as Ever.”

May 16, 2024: Just the News ran TPA’s op-ed, “Electric Vehicle Subsidies as Complex and Costly as Ever.”

May 16, 2024: The Boston Herald ran TPA's op-ed, "Fiscal woes; Postal Service wants another taxpayer bailout."

May 16, 2024: Highland County Press ran TPA's op-ed, "Electric vehicle subsidies as complex and costly as ever."

May 17, 2024: Filter Magazine ran TPA's op-ed, "Recent Reports Reflect How the FDA Props Up the Cigarette Trade."

Have a great weekend!

Best,

David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx

============================================================
** ([link removed])
** Like Us On Facebook ([link removed])
** ([link removed])
** Follow Us On Twitter ([link removed])
Our mailing address is:
1101 14th Street NW
Suite 1120
Washington, DC xxxxxx

Want to change how you receive these emails?
You can ** update your preferences ([link removed])
or ** unsubscribe from this list ([link removed])