Imposing a 27.5 percent tariff on Chinese imports not only would be disastrous in its own right, it would not stop there. China almost certainly would retaliate, and the seeds of a trade war would be sown. The Schumer-Hillary tariff on China could easily turn into the Smoot-Hawley tariff of the 21st century. Just as Smoot-Hawley quickly got out of control - expanding originally from an effort to protect farmers - so too would Schumer-Hillary get out of control as other petitioners quickly lined up to demand protection against other countries "flooding" our economy with "cheap" goods and "manipulating" their currencies to give their exports an "unfair" advantage.

There is a permanent lobby in Washington for replacing free trade with managed trade led primarily by Fred Bergsten, a former assistant secretary of Treasury for international affairs under President Jimmy Carter and now the director of the Institute for International Economics. Bergsten recently made a pitch before the Counsel on Foreign Relations for a pre-emptive 50 percent tariff on China to prevent an international economic calamity. Even former Nixon Commerce Secretary Pete Peterson, who supports the idea, acknowledges that a hefty protectionist tariff on China is playing with fire. Peterson said, "I don't suggest using sticks lightly. They're a very dangerous thing to get started because they can result in retaliation and so forth."

The simple truth is, there is no demonstrable instance in economic history where nations were made worse off by free and open trade. There are only doomsday scenarios spun out of the imagination of half-baked economists that are concocted to spur governments to act pre-emptively. There are, however, innumerable instances where a false fear of free trade (usually goaded by economic interests who benefit in the short run from protectionist policies) has led a government to "pre-empt a crisis" with protectionist policies that very quickly cascaded into a genuine economic calamity. Smoot-Hawley is the most dramatic instance in the last hundred years. Let's not tempt fate with a Schumer-Hillary tariff that could become the Smoot-Hawley tariff of the 21st century.