Free Trade

Restricting Exports Makes It Harder To Fight Coronavirus

Export restrictions only make sense if you're unable to understand the obvious consequences of that policy.

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American medical gear being exported to other countries could be subject to seizure by customs agents under the terms of an executive order President Donald Trump issued last week.

The new policy is intended to bolster domestic supplies of face masks, protective gloves, and other equipment that might be in short supply. But this myopic approach is likely to leave everyone—Americans included—with less of what they need to fight the coronavirus.

Following Trump's April 3 executive order, U.S. Customs and Border Protection (CBP) and the Federal Emergency Management Agency (FEMA) released a joint statement saying they would be "working together to prevent domestic brokers, distributors, and other intermediaries from diverting these critical medical resources overseas." If necessary, CBP would "detain shipments" of personal protective equipment, including N95 face masks, surgical masks, surgical gloves, and other medical-grade gear "for use within the United States."

The U.S. thus joined dozens of other countries in implementing restrictions on the free flow of medical equipment. Data collected by Simon Evenett, a professor of international trade at the University of St. Gallen and the coordinator of research for Global Trade Alert, show 102 new limits on the export of medical gear imposed by 75 different governments since the beginning of the year.*

This sort of "zero-sum behaviour risks inflicting an unconscionable human toll," the publication warns.

On the surface, cutting back exports in the midst of a national public health crisis might seem like the logical thing to do. America is facing critical shortages of medical supplies, including face masks and ventilators, so it feels wrong to be exporting equipment and gear right now.

Unfortunately, that response is short-sighted—and potentially devastating for American health care workers. The United States relies on global supply chains to provide much of what's being used to fight the coronavirus, and cutting off exports will only encourage our trading partners to do the same.

"At a time of frightening shortages of vital medical equipment to fight the COVID-19 pandemic, the Trump administration has taken bold, decisive action—to make the shortages worse," writes Chad Bown, a senior fellow with the Peterson Institute for International Economics. He points out that America exported about $1.1 billion worth of medical equipment in 2019, but also imported more than $6 billion.

Indeed, other policies adopted by the Trump administration during the coronavirus outbreak recognize the importance of global trade. Last month the White House lifted its counterproductive tariffs on medical gear imported from China. Project Airbridge is using military flights to bring medical supplies directly into the United States from other countries. But you can't expect other countries to continue trading with you if you don't also trade with them.

"The Trump administration must allow companies to export, because that is what ensures America's access to imports," writes Bown. "And imports are critical to America's fight against the ravages of this horrible disease."

To see how raising barriers to trade can hurt Americans during a pandemic, look at the recent spat between the White House and Minnesota-based 3M Corporation. Best known for making sticky notes and other stationery products, 3M also happens to be one of the world's largest suppliers of respiratory face masks—including the medical-grade N95 masks for which demand is surging amid the COVID-19 outbreak.

Earlier this month, Trump tried to cut-off the company's face mask exports to Canada. Peter Navarro, the White House's top trade advisor, told The New York Times that 3M lacked "pride and patriotism" because it continued to export masks to one of America's closest allies.

3M fired back by noting that the special type of wood pulp that 3M needs to make surgical masks comes from…yes, Canada. "Ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done," the company pointed out in a statement. "If that were to occur, the net number of respirators being made available to the United States would actually decrease."

The way to get more medical equipment for American health care professionals is not cutting off trade. It's boosting production—here, and everywhere else. Thankfully, the market is doing exactly that, even as governments try to raise unnecessary and counterproductive barriers. The mill where 3M sources that special wood pulp is working overtime to boost production, allowing 3M to double its monthly mask-making output since January.

As the world continues to deal with the ever-evolving coronavirus pandemic, trade is essential to making sure that limited supplies are distributed to the places where they are needed most.

"Countries are going through this crisis on different schedules. Some are at their peak. Some are not," says Simon Lester, associate director of the Cato Institute's Center for Trade Policy Studies. "We might be helped by our own export restrictions, but we'll be hurt by somebody else's retaliation."

Export restrictions only make sense if you're unable to understand the obvious consequences of that policy. Of course, Navarro once promised that other countries wouldn't respond to the Trump administration's tariffs, and we know how that worked out.

*UPDATE: This post has been updated to include more recent data provided by Evenett after publication.

NEXT: Good News: Coronavirus Death Estimates Keep Shrinking

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  1. Restricting trade makes everything harder.

    1. Dirty Chinese commies use slave labor to undercut domestic producers and make worthless crap that people buy because they’re stupid! Only Trump can save us with tariffs, subsidies, and other restrictions on the mythical free trade idea that clueless libertarians support because they don’t understand the real world! MAGA! TRUMP 2020! Aaaauuuuggghhh!

      1. I do think this little disaster has shot some holes in the “free trade and resulting specialization” is only good theory. I think some measure of incentives/disincentives has to be made by government to prevent all or essentially all of industrial sectors to relocate overseas. Government created a lot or even most of the conditions that caused companies to move operations to China in the first place (corp taxes, overly restrictive worker protections, asinine “safety” regs, etc.).

        And at some point we are going to have to make an effort to keep domestic manufacturing and other low-skill jobs here, or come to grips with the necessity of UBI. Not everyone is smart enough to go to college and succeed in a service and knowledge based economy. We gotta have something for the dummies to do, or we will end up looking like India with tin shacks covering every square foot.

        1. Holy shit, DoL is actually more rational than sarcasmic. Kudos. Dont actually disagree with this post. Sarcasmic is still only on freshman year economics where he can articulate only ideal simple systems.

          He refuses to actually admit such things as risk analysis and actuarial costs to said risks exist. He also refuses to acknowledge risks are modified based on past behavior such as Chinas.

          1. Lighten up, Francis.

          2. He refuses to actually admit such things as risk analysis and actuarial costs to said risks exist. He also refuses to acknowledge risks are modified based on past behavior such as Chinas.

            So l what you’re saying is that free-traders and libertarians are simpletons who don’t understand the complexities of the real world, and we need to use force of government, led by a wise man like Trump, to restrict trade for the good of God and Country?

            If that is the case then you should be agreeing with my sargasms, instead of having a fit.

          3. I went to school for finance. I was that student who would correct professors during an intro to derivatives class or bring up mises in macro econ (which should have been named Study of Keynes). Economics is as much a science as the other social sciences, which is to say it isn’t much of one. I think we should be flexible and examine evidence when it comes to economics, because there is no unifying theory or absolute mathematical proof to show us what is real or right. Experiment and examine history, and make your best guess as to what comes next.

            I keep saying I believe in libertarian ideals, but I also acknowledge that they are ideals, not realities. Someone will fill a power vacuum, collectivization can be powerful in a competition with only one winner(no rugged individual ever won a war). The inverse of each is also true: centralization of power creates inefficiencies and injustice, collectives lack creativity and also create inefficiencies and injustices. That does not mean I am rooting for warlords and commies. It means I have been around the block a few times.

            It means I can believe scientists when they tell me there is global warming, but also disagree with politicians who want to send tax dollars to solar start ups.

            1. I…can actually appreciate this line of reasoning. I take back some of the mean things I’ve said to you.

            2. It means I can believe scientists when they tell me there is global warming, but also disagree with politicians who want to send tax dollars to solar start ups.

              Concur.

        2. And at some point we are going to have to make an effort to keep domestic manufacturing and other low-skill jobs here, or come to grips with the necessity of UBI.

          How? Tax imports? Use taxes to subsidize favored industries?

          We gotta have something for the dummies to do, or we will end up looking like India with tin shacks covering every square foot.

          I see that argument a lot. I totally disagree. People will always have new wants and there will be people trying to supply them. It takes time for these new ideas to because automated, and in the mean time you need stupid people to do boring, repetitive tasks. If the economy was static I’d agree with you.

          Also, minimum wage doesn’t do stupid people any favors.

          1. because become

          2. “I totally disagree. People will always have new wants and there will be people trying to supply them.”

            We’ve seen what that restructuring based on wants is starting to look like, though. It looks like a bunch of 1099’ed freelancers driving uber while losing money on deprecation and other costs. It looks like kids getting into life long debt because “college is how you get a good job”. It looks like full employment while average household debt grows and grows.

            So far, it does not look sustainable.

            I thought the same thing as you up until recently. I change my opinions as new facts become available and I have time to digest them.

            My utopia is libertarian, but I can’t let my ideals cloud my vision. If completely unrestricted trade brings about the destruction of societal foundations, then maybe certain truisms aren’t so true.

            1. I’m one who sees principles as foundations. They aren’t perfect. Nothing is. They are indeed ideals. But consciously deviating from the principles of liberty and free trade, for what ever “real life” reasons, tends to have an unhappy ending.

          3. Your concern for “stupid people” is indeed touching. Like the ones at Walmart?

            The people at the Walmart near my house are mostly black and brown. You’re not taking about them are you?

            Yikes! You douchebags are not only pretentious, you’re racist too! Better check that privilege!

            Haha.

        3. Trade is not country with country. It is people and businesses with each other. It is voluntary. What kind of libertarian thinks governments have any kind of right to interfere with trade? When you change that right to duty, you go from mere ordinary statist to socialist.

          1. Unfortunately there is still a grand power struggle that is country with country, and our personal fates and outcomes are tied to it. We can’t pretend to each be our own little sovereign nation. I think trade should be as free as it can be, until there is some obvious threat to our security, like having our medical equipment made in a communist country, or having the devices we all use to communicate with each other sending our personal info to our commie adversaries. For instance, allowing Chinese telecom (Huawei) in the US would be utterly stupid. They aren’t going to play fair, so why should we pretend they are?

          2. Is it still voluntary if Uighur slave labor makes your iPhone?

            1. Is it still voluntary if workers have sexist bosses?

              Is it still voluntary if workers have to work extra to pay off student loans?

              Is it still voluntary if workers have to pay exorbitant rents?

              Where do you draw the line?

              Why do you single out slave labor in China while ignoring child miners in Africa, or state workers anywhere?

              If you base all your decisions on the worst possible cases, I wonder how you walk with that ten foot thick meteorite shield over you.

        4. You can’t force people to work, unless you are willing to go the full dictatorship route. There is plenty of work to do here in America. But Americans don’t want to do it for the market labor rate.

          Everytime you call for an increase in the minimum wage or more regulation, while buying cheap goods from China, you are engaging in utter and complete hypocrisy. Especially if add some bromide about how we shouldn’t value American lives over people in other countries.

          1. One thing all these anti-globalists forget is that raising wages enough here to attract workers means some other jobs lose workers. Ultimately there is no way to produce as much as we want when restricting products to US-made.

            Anti-traders are simply ignorant and refuse to enlighten themselves. They are proud of ignoring reality.

            1. Most of them aren’t saying we should produce everything here or that we should restrict trade outright, but it behooves people that support free trade to admit that yes, there are downsides to our preferred policies.

              Acting like the people that have reservations about it are ignorant fucks is counterproductive.

      2. Lol. God you’re a fucking joke. Why did you even bother complaining in the roundup thread? This is literally the behavior you attempted to condemn, but it is all you have. You actually do act like you accuse others falsely of acting.

        1. Google hyperbole and then take a sedative.

        2. The difference is that I’m not serious. You are. Terminally so.

          1. Exactly. He is so caught up in Trump worship (By God, he beat Hillary! He must be a miracle worker!) that he has lost all reason, and doesn’t even have a sense of humor left. The personification of TDS.

            1. You’re not helping.

              1. Wasn’t trying to. You have your way of irritating people, I have mine, they have theirs.

              2. Visit Shemale Hamburg and relax a little in a pandemic time

      3. “Dirty Chinese commies use slave labor”

        Yes they do.

        I love how the Globalist No Borders crowd think liberty is keeping your slaves offshore.

        Think the slaves whose labor you’re profiting from might view your complicity in their slavery as aggression?

        1. Both is such a pussy, babies take his candy.

          Then he cries.

          1. Oops, supposed to be a reply to buybuy’s 9:14 comment below.

            Here, it’s just awkward and weird

            1. It was a puzzle.

          2. Yea, it will be better for him to visit Transen in Nordrhein-Westfalen and relax a little

      4. Ok Commie

    2. “The United States relies on global supply chains to provide much of what’s being used to fight the coronavirus, and cutting off exports will only encourage our trading partners to do the same.”

      All of a sudden US trade actions might cause a other countries to change their trade behavior.

      This, from the guy who denies that trade barriers can work to bring trade partners to the table to reduce their tariffs.

      The constant is that any trade action that benefits Americans is *wrong*. We should always unilaterally disarm in trade, and give other countries *everything* they want, for *nothing* in return.

      #AmericaLast

  2. So now the Trump doctrine is that BOTH imports AND exports are bad? WTH?

    1. Self sufficiency, dude. If you don’t support it then you’re a clueless free-trader who doesn’t understand that dirty commies will use our dependence to cause irreparable harm to our lives. We gotta make everything domestically. That’s the only way to protect us from the ChiComs and others who hate us because we’re like beautiful and stuff.

      1. Have you ever argued against anything without resorting to lies or strawmen? You’re broken buddy.

        1. If my exaggeration and hyperbole strike a chord with you, then maybe there is more truth in my sargasms than you are willing to admit. If you find it so offensive, it could be because I’m right.

          1. No, it’s because you’re so disingenuous.

    2. The Trump Doctrine is #AmericaFirst US trade policy, whether on exports or imports.

    3. Yes, that is pretty much his doctrine, as idiotic as it seems. TRADE is bad.

  3. Restricting exports… like when china ordered purchased goods to turn back around to the main land? You’ve never mentioned that behavior in your articles Boehm. You cant have a free market when one of your primary trade partners doesnt respect even contractual agreements. Reality does exist. Evolve, stop living in an idealistic world.

    1. This. We aren’t the only player with a ball. Can’t pretend its bad when we do it but just free market when someone else does it.

    2. You cant have a free market when one of your primary trade partners doesnt respect even contractual agreements.

      Good luck finding a free-trader who would disagree with that statement. Unless he’s made of straw.

    3. Try to rebut unilateral free trade. You can’t. You can’t even rebut bilateral free trade. You are a socialist central planner, through and through. You are no more libertarian than Uncle Joe, whichever one you pick.

      1. Adam Smith rebutted it.

        He was in favor of every tariff type Trump has used.

        Trump is Adam Smith on trade.

    4. So you’re saying it’s good and moral because they did it first? Gotcha.

      1. No, we’re saying that looking the other way at trade partner malfeasance as they rob you is retarded.

      2. How can you be so poor at comprehension?

    5. “It’s only bad when America does it.”

  4. chick in the photo has masks! get her!

  5. Export restrictions only make sense if you’re unable to understand the obvious consequences of that policy.

    “Export restrictions make perfect sense and Boehm is unable to understand the consequences.” is a perfectly accurate and relatively objective reading of that sentence.

    1. Another fuckin’ socialist central planner. You pundits wouldn’t recognize individualism if it left you alone.

  6. I get the inherent logic behind the concept of careful what you do cause someone might do it back to you. But I think there is a bit of a nuance in this particular circumstance that is being overlooked. If an Italian company was about to ship masks to the US and the Italian government stopped it in order to provide Italy with needed medical supplies, would we really be that upset about it? I mean, I think we would understand that they too need such supplies.

    I get if you hold up or prevent trade in non-dire situations for economic or political reasons being worried about suffering a reciprocal blow-back. But in situations where the dying man doesn’t give up his lifesaving equipment, not sure there is created a reciprocal animosity.

    1. Finally, some rational thought. Yes, you are correct. But in situations where the dying man doesn’t give up his lifesaving equipment, not sure there is created a reciprocal animosity.

      Boehm the birdbrain does not engage in logical thought before climbing on to his trade hobbyhorse.

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