Trump's 'America First' Plan Is Naked Special-Interest Policymaking

When anyone says, "I'm for free trade, but it must be fair trade," they are really saying: "I am not for free trade."


Xinhua/Sipa USA/Newscom

Donald Trump, the self-proclaimed voice of American working people, has decreed that the prices of washing machines and solar panels shall rise. So it is written. So it is done.

Trump's decree, placing tariffs (taxes) on imported versions of those goods, will impose higher costs on consumers to help (in the short run) the minority of Americans who work in those industries. That's how protectionism works—a favored group of firms and workers benefits at the expense of everyone else.

Trump calls this "America First" and looking out for average Americans, making him either a demagogue or an ignoramus. In fact, it's naked special-interest policymaking.

Trump acted on recommendations from his U.S. trade representative (USTR), Robert Lighthizer, who invoked the law that gives the government the power to impose tariffs when, in Lighthizer's words, "increased foreign imports … are a substantial cause of serious injury to domestic manufacturers."

This particular law does not require the U.S. International Trade Commission (ITC) to identify any "unfair trade practice," such as dumping or subsidies. All that is necessary is that a domestic firm (for example, in the washing-machine case, Whirlpool) or industry convinces the ITC and USTR that foreign competition has harmed it—that is, that American consumers prefer the imports to domestic alternatives.

Thus the American Firster Trump is coddling wimpy, whining firms that are better at lobbying than competing in the marketplace. This he calls "draining the swamp."

Not that so-called dumping and subsidies would justify tariffs. They do not. Dumping, which is roughly defined as selling below cost, amounts to nonsense when you remember that costs are subjective. And while a foreign government subsidy constitutes an offense against the taxpayers of the foreign country, it cannot be construed as an offense against American firms (which, like solar-panel firms, often have their own subsidies) or American consumers.

Moreover, subsidized firms are hardly efficient firms. It's competition that keeps firms on their toes.

"The President's action," Lighthizer said, "makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard."

Balderdash. First, note for the record that the word consumers appears nowhere in that sentence. Next, you'll see that while the word certain or favored belongs in the sentence to modify workers and businesses, it too is nowhere to be found. Trump and his protectionist team know they can get away with this bunk because most people are strangers to the economic way of thinking.

Obviously, protecting people who make their living in the washing-machine and solar-panel industries from competition cannot help all workers and businesses since protectionism by design raises prices. Because consumers will now have to pay more, they'll have less money than they would have had with which to buy other products and services or to save and invest for the future. Their welfare, that is, will drop. Why don't consumers and those other workers and businesses count? Because they are invisible. Moreover, if Americans buy fewer exports, foreign citizens will have fewer dollars with which to buy American-made goods or to invest in American enterprises. And if foreign governments retaliate against American products with their own protectionist measures, Americans who work in exporting industries will suffer. This will include farmers and ranchers.

Thus Lighthizer's statement, like pretty much everything about the Trump administration, is sheer flapdoodle.

Trump can't open his mouth about trade without sticking his foot in it. He loves to say he favors free trade—but then adds that it must be fair and reciprocal. Is he so stupid that he doesn't know that trade is reciprocal by definition? Trade is exchange, and exchange is reciprocal. Each party gives something up to obtain something else. If only one party transfers a good, it's a gift. There can no more be nonreciprocal trade than there can be square circles.

When he goes on about reciprocity, Trump is likely thinking about trade agreements between governments. He rails against such agreements because he believes they benefit other countries more than America. But trade agreements are not trade; they are arrangements politicians make to set the terms on which people of different countries may trade. In other words, they are in some manner interferences with people who wish to trade unmolested.

When anyone says, "I'm for free trade, but it must be fair trade," they are really saying: "I am not for free trade." Trade is free when neither buyer nor seller has a gun to his head, that is, when either can walk away because he doesn't like the terms.

Trump should not have the power to decree that the United States shall have a washing-machine, solar-panel, or any other kind of industry. That Whirlpool exists is no argument that it should continue to exist—especially considering that the company's resources and workers could be making other things we would like along with our washing machines.

The conservative mindset (which many progressives also display) that leads Trump to save firms and industries that can't compete is a call for stagnation and decline. Free people buying and selling in free markets should determine what is produced.

This piece was originally published by The Libertarian Institute.

NEXT: 'My Plan Is to Let People Do Whatever They Please'

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  1. " American Firster "

    Damn those American Presidents who put America First!

    Foreigners First!

    1. Which American Presidents have ever put America first in their trade deals? If they had, we'd have no tariffs or import restrictions.

      1. Many of these presidents are not willing to endure market reset by completely opening the USA to free trade without tariffs and restrictions. It would result in lost American jobs until the market resets. Politicians cannot endure that kind of American unemployment.

        The preferred strategy is to adjust trade agreements with other countries to reach some kind of trade "fairness".

        Right now trade agreements are not in America's favor, so Trump wants to tweak that.

        Unlike Obama who put other nations ahead of the USA, Trump wants to try and put the USA first. We know that the best method is for open and free trade.

        1. Right now trade agreements are not in America's favor, so Trump wants to tweak that.

          You are as economically illiterate as Trump.

          1. No, he's just 100% correct. Your misunderstanding of economics is what leads you to your incorrect conclusions.

            1. All voluntary trade is fair trade.

              Who is forcing the Chinese to subsidize their exports to us? -- The Chinese government.

              And you think the proper response is to tax our consumers?

              Hint: This is not a training manual.

              1. The proper response is to squeeze a China enough to get them to knock off most of the bullshit. However I'm sure that you are perfectly willing to let them abuse our markets and destroy as much of our do,estimates industry as possible to get another 5% off their shit while sneering at the people who got fucked over. Laughing about 'their jerbs'.

                That about cover it.

    2. Yes, I agree! Foreigners First!

      Put THEM first inline to work their asses off to send me better and more affordable good and services! If their governments want to stiff their own people and make them pay more and USA import-buyers pay less? Wooo-Hoo, more affordable stuff for me! Let them all work their arses off all day every day, while I sit in the park and drink beer! What's not to like about that?!?!?

      (And such policies cost me as a taxpayer NOTHING, which is a HUGE plus).

    3. I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

      This is what I do...

  2. Be fair Sheldon. Trump didn't invent "anti-dumping" law he invoked here and was not the first to use it. His predecessors in both parties did likewise. And the American consumer tolerates it because he believes that the law will protect him when its his turn to demand protection, in other words, "i'll let you screw me now because, in a few years, it's my turn to screw over someone else."

    1. But people don't believe they're being screwed. They think the Chinese are doing something dastardly, because economics is math and is hard, and only government bureaucrats can understand it, so if they say it puts Americans out of work and is unfair, they believe it.

      They see only the seen, the American companies gone bust because of unfair Chinese competition. They don't see that American companies were (and still are) inefficient and would be better off doing something else. They don't see the Chinese people being taxed to pay for our cheap goods. They don't see the thousands of Americans who save money to spend in other ways, or the thousands of American workers better off because more of their product is being bought with those Chinese taxpayer subsidies.

      I wish some politician would say something like that: "I want to thank the Chinese taxpayers for helping so many of our people buy more stuff and keeping so many of our businesses employing more Americans."

      1. Amen! Right now construction workers (who install solar panels) are being put out of work by the Chief Idiot in Charge, Trumpster-to-the-Dumpster, and His tariffs on solar panels.

        1. As opposed to when Block Yo-Momma's policies put American workers out of work.

        2. As opposed to Obama tolerating China's Bad behavior, which out American companies out of business.

          1. I applaud when inefficient companies go out of business.

            You apparently want to still make red baskets for tourists, or buggy whips for nobody, because you don't want American companies to ever go out of business.

            If China started making subsidized buggy whips by the zillion, would you call that unfair to American companies?

            There's a reason it no longer requires 90% of the population to grow food. Do you want us all back on the farm too?

            What is the difference between going out of business because the product is no longer needed and because the product can no longer be made efficiently? Here's another clue: product utility depends on price. Demand for useful things drops as prices rise. Demand for useless things rises as prices drop.

            1. FFS, you're a clueless tool. You really need to lose everything. Maybe gain a little perspective.

      2. The Chinese are doing something dastardly. If you cannot see that, try looking at why China does the things it does.

        China is not engaging in free trade. The Communist Party sets prices and all sorts of policies relating to business. One strategy is to bankrupt competitors, so they can have a monopoly and raise prices.

        Another strategy is to make it so only China has the market cornered on most of the products that the World uses. This is great for China sneaking in exploits to military computer systems because you buy your computer hardware from China. America has been doing this for years.

        Another strategy is for China to hold debt of powerful nations to use that as leverage in land grabs. Claiming the South China Sea and building islands out of nothing is an example of this. China is looking to expand is territory, just ask the Tibetans.

        1. China is doing lots of things wrong, but subsidizing their exports hurts only them. Not only does it tax their people unnecessarily, but it distorts their comparative advantage.

          Imagine your neighbor giving you tomatoes cheap to discourage you from growing your own tomatoes. Now you have more money left to buy other things, and you can grow other things too, say potatoes. Is your neighbor going to counter that by growing potatoes to sell you cheaply? Great, now you have even more money to buy even more things, and even more free garden area to grow even more different things.

          How long can your neighbor keep that up? You do not care.

          How long can China keep that up? You should not care.

          Are you worried that China will stop subsidizing solar panels and no American companies will be left to fill the void? That old fairy tale has been disproved many times for monopolies, and is just as wrong for Chinese monopolies. In this particular case, look at how many American solar panel companies have been driven out of business. That ought to be a damned fine clue that they will spring up again when opportunity arises.

          1. When your life is destroyed by this kind of stacked deck I will laugh at you as you starve. It's the Scarecrow way, right?

          2. Your understanding of global trade and economics is very limited.

            Companies can't just "spring up again when opportunity arises". The capital investment required to enter an existing, saturated market is highly prohibitive. Once the factory is shuttered and the people gone that is typically the end. Rarely is it possible for re-entry.
            That is why dumping works and why those nations that are waging economic war with the US do it. They absorb the short-term loss for long-term gain. Your understanding of economics presumes that you know more than China, South Korea, etc, etc. That they are just hurting themselves with no longterm gain, and you just happen to know better. Pretty arrogant on your part.

            Dumping is a form of economic warfare. countries do it for very good reasons....and its is globally fought against for also very good reasons.

      3. The Chinese are building islands from nothing in the ocean and that is for a purpose. They are trying to build new Chinese territory to surround Taiwan and have a strategy of a Chinese co-prosperity sphere in the western Pacific.

        This is what the Japanese tried to do in WWII. The Japanese considered the actions of refusing sales of oil to Japan as an act of war because that oil was theirs. These Japanese considered their expansion rightful, so any attempt to limit that made you their enemy.

        Libertarianism is great when all persons play by the rules. China is only using the rules to build up a massive military force to keep America at bay. China could never hope to their sea trade routes against the US Navy while China could easily control their sphere of influence on land with millions in their army. By expanding small man-made islands, China hopes to see the US navy coming to aid Taiwan and destroy it.

        In the meantime, China will be content herding their people into factories to produce cheap stuff to sell to the USA and collect more and more US debt.

        1. China, and you, may think China can ignore the rules of economics, but reality will show otherwise.

          1. you are smarter than the economists designing China's global trade policies.

            that's funny

  3. I sure do understand the gut feeling that "fair" trade is vital. That if the other guy is "cheating", you must counter it. That's one of the versions of the Prisoner Game, tit-for-tat, right?

    But the problem is that China subsidizing its exports is not cheating us, it's cheating it's own people. People here lose jobs for all sorts of reason, primarily tech innovation and automation. The few who lose their jobs because the Chinese government wants to use Chinese taxes to sell cheap solar panels to Americans is far outweighed by the money far more Americans save in getting cheap solar panes; all the toxic byproducts of their manufacture remain in China. It doesn't take formulas and math and esoteric economic concepts to understand the job losses don't match. It just takes the common sense that jobs are only a small part of prices and can never equal the price difference or even come close.

    Gut instincts just don't work when you're focusing in the wrong aspect. People cn't wrap their heads around the idea that elite government bureaucrats might do something wrong, so they think their must be some magic underyling reason for the Chinese to subsidize solar panels, and we need Trump magic to counter it.

    1. Also I understand their is a "cut off noses" gap between USA and China! Their Government Almighty is making them cut off their noses more than we are! USA Government Almighty ***MUST*** act to close the gap, or we will be left WAAAAY behind!

    2. I think the issue here with completely free trade is employment. Smart, adaptable people will succeed no matter what. And they have by and large. What do you do with the dumb people who don't want to go to school and learn a valuable skill/trade? They can't just get a manufacturing job with wages you can raise a family on. Now they are a bartender or a waiter or shoe salesman or some other low paid, relatively insecure service sector job. Great, they can buy a lot of stuff because it is cheap (like a TV or bluejeans or an iPhone) but their job still is low paid and insecure, not like the union protected, low skilled manufacturing jobs of the past. Historically too, as our manufacturing jobs have diminished, our service sector has grown.

      This is why economists say when you have free trade you should be ready to pay for retraining/unemployment to deal with people who were displaced. Whether a population wants to or not is another issue.

      I am not arguing we should seek out these manufacturing jobs, it is bad economics. It is good to accept the reality that other issues might be at play too, however, and try to see why people would be complaining about their situations.

      1. Yeah man, I think that was a thoughtful and balanced post...

  4. "Dumping, which is roughly defined as selling below cost, amounts to nonsense when you remember that costs are subjective."
    Dumping involves setting prices below market value with purpose of undercutting competition so they go out of business. The main mistaken idea is that companies and countries that work to undercut competition will be successful in the long run. These companies and countries raise prices once competition is bankrupted.

    If the USA embraced free market more, this would never work. When the prices were raised, a new company would be started to produce the item cheaper and better. Unfortunately, starting a new business takes capital, skilled workers, and the ability to get into the market effectively. This can take time or sometimes never happens for various reasons.

    Time is not on the side of politicians, as they answer to voters. Since many countries are not willing to engage in free trade, rigging the trade game is the order of the day. There is a reason they used to call this stuff trade wars.

    1. You're another one who extols the grandeur off free markets ... with memorized slogans and soundbites ... but no clue how they work. evangelizing for Ra, The Sun God.

    2. So your solution to China doing stupid stuff if for the US to join in the stupidity. You don't even believe your own words:

      If the USA embraced free market more, this would never work.

      Your solution, then, is for the US to go even further from a free market.

      Fuckin' genius you are. Bigly. Almost as bigly as the Genius In Chief.

  5. Start working at home with Google! It's by-far the best job I've had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.


  6. Not going to bother to read this pile of sh!t.

    Free and open competition with the chicoms means becoming a chinaman. Freedom is costly. Of course their system is more efficient. It is also depraved and degenerate.

    No thanks. We should actively work to impose trade barriers against regimes like the chicoms every way we can. And Americans who don't like it should move out.

    1. Oh, good. ANOTHER authoritarian right. Who made you emperor?
      Try that on my liberty and I'll kill you.

    2. Economics can be difficult to grasp for some. Apparently reading can too.

      1. Oh, good. ANOTHER authoritarian right. Who made you emperor?
        Try that on my liberty and I'll kill you.

        1. Hihn those are death threats stupid. Be careful someone might think you're serious. The rest of us know the only thing you kill is cat turd burritos.

  7. I'd feel fine if Trump were criticizing trade deals like NAFTA on free trade grounds, like Ron Paul who says NAFTA isn't free trade but managed trade. But Trump doesn't do that at all. He criticizes it on protectionist grounds, arguing in favor of a different kind of government management and restriction of trade which is supposedly better.

    1. ^ This.

      So much for that Trump libertarian moment, huh?

  8. The thing we here in the US need to remember is what Trump said when he spoke after the other leaders (of Europe) spoke. He is putting America first just as all the other leaders put their nations first. But butting America first does not mean that the rest of the world has to suffer, quite to the contrary it means that the rest of the world will do better because the US is doing better better also. We see this is the case because the world economy estimate has just be has been raised after it was it was first put out.

  9. I am for free trade. I am against trade with China that enriches a country anti-liberal, anti-democratic, and that seeks to replace the system established by the United States/the West with one managed by a communist oligarchy in Beijing.

    Free trade makes everyone ABSOLUTELY more wealthy. I am more wealthy because I can buy cheap stuff, random Chinese guy is more wealthy because he can sell me stuff. Free trade also can make people RELATIVELY more wealthy. China was invited to modernize by engaging in humongous trade with the West, for Western corporations to utilize the cheap labor pool of China to sell more stuff than their competition. I am against the fact we are making China relatively more wealthy, a country with unfriendly intentions like to forcefully invade democratic Taiwan and reunify with them, to claim open ocean in the South China Sea as their territory, to bully our friends in Japan, and who still think war is a legitimate way to claim new territory as with Vietnam or the Philippines when they claimed islands that were not theirs with violence in the recent past.

    Fun fact: Do you all know the Chinese military swears loyalty to the Communist Party? While ours swears loyalty to the ideals of the Enlightment, theirs swears fealty to the whims of the Party.

    1. China should definitely be kept down. They are not a friend to anyone.

    2. "Fun fact: Do you all know the Chinese military swears loyalty to the Communist Party? While ours swears loyalty to the ideals of the Enlightment, theirs swears fealty to the whims of the Party."

      Would that enlightenment-loving military actually be deployed for liberty expanding purposes. And are you telling me that our military doesn't blindly obey political parties? What the hell was Iraq - 2003?

      1. And are you telling me that our military doesn't blindly obey political parties?

        The military obeys the president, not a political party. Or are you forgetting all those Democrat-led wars?

  10. There's this quote from Snowcrash: ""When it gets down to it ? talking trade balances here ? once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here ? once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel ? once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity ? y'know what? There's only four things we do better than anyone else: music. movies, microcode (software), high-speed pizza delivery"

    Except that we don't do all of those better than anyone else anymore and, guess what? People in America don't want to enjoy what a Pakistani brickmaker would consider to be prosperity!

    1. This is certainly possible and I am not convinced it would be a bad world if everyone lived in relative equality as long as they did not try to screw each other too much. People would (hopefully) still have the opportunity to prosper and succeed. Plus if we are all trading, we are probably not fighting and probably innovating too. Win win.

      The other possibility, to retain our historical inequities/inequalities, is blatant militarism, Empire, loot, and conquest.

      I would choose the former.

      1. If we're doing empire, loot, and conquest, we're sure doing it wrong, because we forgot to do the looting part.

        In fact, that's my chief problem with US policy: That we're suffering from imperial over-reach, from intervening all over the world, and not even demanding any tribute in return for the Pax Americana. We have to go one way or the other: Either get the tribute, so it's sustainable, or end the Pax, and let the rest of the world manage itself.

        1. Yeah, I always wondered about this. And maybe we should grab a bunch of loot while our navy and air force still has a force advantage. At least then we would be guilty of all the global crimes the left, including our own, accuses us of.

  11. One of the great mysteries of the Trump era is why market participants, in this deregulatory environment, have increased their entreaties to the government to crack down on "unfair" market practices.

    The answer isn't too hard to find. Evidence is literally all around us. CEOs and company Boards are savvy; they know a chump when they see one; and they know how susceptible to flattery Trump is. Announce that your long-planned wage boost for employees is due to Trump's tax plan, and then maybe you'll have his ear when you want to sic the DOJ on your main competitor.

    When Trump promised to "drain the swamp," he was referring precisely to this kind of crony capitalism and special interests-governing. But then he got elected and shifted the terminology to being about the so-called "deep state," and the WWF-watching base went right along with it. So now we have a federal government that isn't even trying to do things right.

    1. It's understandable when you've got your own nominal employees using burner phones to conspire against you, and agencies you nominally are supposed to be in control of refusing your orders, that you start worrying about the deep state. Just because some people don't like Trump doesn't mean there isn't a deep state that's fighting him.

      For my part I just wonder why anybody would think it's sensible to underestimate a billionaire married to a supermodel who gets elected President on his first venture into politics. If this were a work of fiction, you'd call Trump a Marty Stu, not a chump.

      1. For my part, I just wonder why Trumpsters keep pasting in the most totally useless arguments.
        WTF does marrying a supermodel have to do with being President. when he's a total failure at BEING President?

        WTF does being a billionaire (on the backs of 4 bankruptcies and ALL his financing from Deutsche Bank, a known money launder for Russia) have to do with being President. when he's a total failure at BEING President?

        What kind of SCUM would seek the Presidency, while campaigning on a 60% income-tax cut for HIMSELF.
        (Trumpsters are easily manipulated and bamboozled.)

        Just because some people like Trump doesn't mean he's a not total failure at being President.

    2. One of the great mysteries of the Trump era is why market participants, in this deregulatory environment, have increased their entreaties to the government to crack down on "unfair" market practices.

      First, there is no evidence for your assertion that these "entreaties have increased"; they probably merely have become more public because Democrats like to hide their cronyism and like to accuse Republicans of it. US corporations were massively in bed with the Obama administration, one of the reason so many CEOs supported him.

      Furthermore, we are not in a "deregulatory environment" in any absolute sense; US government spending as a percentage of GDP is still 5% higher, at around 35%, than it was at the beginning of the Obama presidency; this is massive by US standards and comparable to European statist societies.

      Finally, companies have no guarantee that whatever Trump does is going to stay in place after he leaves office, so they can't behave as if there was a free market from now on.

    3. When Trump promised to "drain the swamp," he was referring precisely to this kind of crony capitalism and special interests-governing. But then he got elected and shifted the terminology to being about the so-called "deep state,"

      You switched from "what are the motivations of companies" to "what are Trump's motivations". Given that the "deep state" thwarted many of his attempts at fulfilling campaign promises, obviously that became the primary problem for him.

    4. The answer isn't too hard to find.

      "Selfishness is a virtue"?

  12. When anyone says, "I'm for free trade, but it must be fair trade," they are really saying: "I am not for free trade." Trade is free when neither buyer nor seller has a gun to his head, that is, when either can walk away because he doesn't like the terms..

    The trouble with that argument is that many sellers do have guns to their heads: European and Asian workers and companies are subject to massive government coercion based on (non-free-market) governmental policy objectives. Furthermore, the actual American buyers are often tax payers with guns to their heads, whose money gets redistributed via various government schemes.

    For example, both the US and Europe have a massive political problem with unemployed blue collar workers due to automation and cheap foreign labor. Since ending the subsidies is not a political option, we can continue to subsidize them through the tax, disability, and unemployment system; or we can subsidize them by imposing tariffs on imports. I don't know which choice is better; nobody does. But any discussion has to start with the realization that the decision cannot be made based on free market economic theory.

  13. The economic illiteracy shown in this article and commenters is an appalling indictment of Libertarians.

    Free trade exists in only narrow areas across the world. NAFTA....not free trade...not even close. Almost all trade across nations is highly managed. That is the status quo.

    So when Trump says he wants to renegotiate the agreements to gain a better deal for the US, he is doing exactly what the president should do. It's sad that anyone expects otherwise.
    In an ideal world, yeh, free trade would be beneficial to all. But we are so far from that, it is little more than a theoretical fantasy.

  14. I can see what your saying... Raymond `s article is surprising, last week I bought a top of the range Acura from making $4608 this-past/month and-a little over, $10,000 this past month . with-out any question its the easiest work I've ever had . I began this five months/ago and almost straight away startad bringin in minimum $82 per-hr

    HERE? ,,,,,,,,,,,,,,,,,,,

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