The Trump administration’s tariffs, it would appear, are predicated on a great folly: the notion that you can increase the price of just one thing at a time.

Frédéric Bastiat, the great French economist and satirist, wrote frequently about the fact that every economic measure has effects that are seen and effects that are not seen.

Take President Trump’s steel and aluminum tariffs, for instance.

Applying a 25 percent tax on imported metals has at least two effects. The first is to increase the cost of foreign supply, which is what you see, but the second is to increase the cost of domestic supply, which is what you don’t see — at least not immediately.

To understand this indirect effect, imagine you’re an American aluminum smelter and that you’ve been selling your products at $1,100 per ton while your foreign competition sells the same tonne for $1,000.

Bring in a 25 percent tariff and your competition’s price suddenly increases to $1,250. In this scenario, would you keep selling for $1,100 per ton, or would you increase your price to match (or just slightly undercut) your competition’s new price? Let’s be frank, you’d most likely pocket the extra profit.

That may sound great for you, but it isn’t........

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