Free Trade

Trump's War on Economic Freedom

In the president’s mind, trade is not a right to be respected but a process to be managed by politicians.

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If Donald Trump's sister is right that he "has no principles," he does at least have a few enduring instincts. Perhaps the most persistent is the president's conviction that American greatness is threatened by voluntary economic exchange, the most powerful engine of peace and prosperity in human history.

Each of us has a fundamental right to the fruits of our labor, which includes the right to exchange the money we earn for products and services. When governments respect that right, mutually beneficial transactions replace zero-sum interactions that forcibly transfer resources from losers to winners. The value of those voluntary transactions does not depend on where buyers and sellers happen to be located.

Trump's rejection of those principles pervades the second-term agenda he unveiled this week. He promises not only to "create 10 million new jobs in 10 months"—which itself betrays a basic misunderstanding of the president's powers and the way a market economy works—but also to "keep jobs in America" through "Made in America" tax credits and "fair trade deals that protect American jobs."

Even keeping jobs in America is not enough to satisfy Trump, who also wants to dictate who can fill those jobs. He would use immigration law to "prohibit American companies from replacing United States citizens with lower-cost foreign workers."

Notwithstanding his vociferous rejection of the "socialism" he ascribes to the Democrats, Trump believes the government must manipulate the economy, which means overriding the choices Americans otherwise would make, to ensure his preferred outcomes, down to details as mundane as the location of air conditioner and washing machine factories. In his mind, trade is not a right to be respected but a process to be managed by politicians.

Ignoring the principle of comparative advantage as well as the self-evident benefits of transactions that both parties freely choose, Trump believes Americans should not be using oil, pharmaceuticals, or medical supplies produced in other countries. To "end our reliance on China" and "bring back 1 million manufacturing jobs," he would provide tax benefits to companies that "bring back jobs from China" and deny federal contracts to businesses that "outsource to China."

Trump's obsession with stopping Americans from buying Chinese goods is at odds not only with his party's former support of free trade but also with its avowed resistance to tax increases. Taking into account retaliatory tariffs as well as the taxes Trump imposed directly, his trade war with China is costing American consumers an estimated $57 billion a year, on top of the costs borne by U.S. farmers and manufacturers caught in the crossfire.

In contrast with his positions on, say, abortion or gun rights, Trump's beef against free trade is longstanding and seemingly sincere. No matter what pointy-headed economists say, he knows in his gut that money spent on foreign goods is wasted, that immiserating autarky is the key to American greatness, and that something nefarious is going on whenever imports from a particular country happen to exceed exports.

"You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners," Trump wrote two decades ago in a book that likened peaceful economic exchange to warfare. "If we didn't trade," he averred two years ago, "we'd save a hell of a lot of money."

When Trump ran for president in 2016, the Republican platform likewise bemoaned "massive trade deficits," even while paying lip service to "open markets." This year the party decided to forgo a platform, saying it stands for whatever Trump has in mind.

Whatever that is, we can be pretty sure it will ignore a wise warning from the 2016 GOP platform. "We are the party of a growing economy that gives everyone a chance in life, an opportunity to learn, work, and realize the prosperity freedom makes possible," the Republicans said then. "Government cannot create prosperity, though government can limit or destroy it."

© Copyright 2020 by Creators Syndicate Inc.

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  1. Trade is the real war to libertarians. If there’s no open borders and cheap labor to exploit somewhere else, they aren’t comfortable.

    Meanwhile the people here are burning shit down. Wonder why.

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    4. This is just Sullum’s TDS (and ignorance) showing. The U.S. has had managed trade since we were a nation. Until 1913 when income tax was authorized to “only tax the wealthy”, the main source of revenue for the U.S. government was tariffing. Hey, I’ve directly benefitted in business from the old North American “Free” Trade Agreement, and it wasn’t free trade, it was Managed trade. Sorry, it didn’t start with Trump, it won’t end with Trump, and Democratic advisors to Obama were advocating similar policies to what Trump has implemented.

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  2. Is it free exchange of goods when one side (the US) allows access to their markets fairly unencumbered (by global standards) while the other side (China)restricts almost all trade from the other country (again the US) and state sponsors corporate espionage to gain trade advantages?

    1. Neither of those are sides to any trades. Trades are voluntary exchanges between people and organizations. Neither the US nor the Chinese government are trading partners.

      You got that ignorance working against you.

      Then there’s the idea you have that minding my business is your business. Controlling who I do business with, who I trade with, is actually none of your business. You have no moral authority to control my life.

      In short, you are a statist slaver. Fuck off.

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      2. Trade with hostile foreign powers is violence against your home nation. As tired a comparison as this is, Nazis fit this situation perfectly. If you traded with Germans in Nazi Germany, you advanced the Holocaust. Ergo, you are the statist slaver, not us for restricting you from making horrific choices.

        Freedom does not mean and never will mean the ability to do anything you want.

        1. I don’t know where you buy your stuff, but people don’t tend to trade with countries. They trade with other people. Buying a German-made good in 1940 is not the same thing as buying something from the Nazi government.

          1. It kinda is with China though.

            1. Cite missing.

      3. When you are doing business with Chinese companies, you are doing business with the Chinese Government. And it is not ignorance, it is a fact of their political system. If it were two private individuals, you’d have a point, but in this case the Chinese Government doesn’t allow their companies true independence. And the US government arguably doesn’t allow our companies to function without massive Government oversight either, so it isn’t free trade or free exchange of goods. That ship sailed a long time ago, unfortunately.

        1. So let’s make it worse? Let’s double and triple down on stupidity?

          1. Let’s squeeze bad partners like China so they level the playing field.

  3. trade is not a right to be respected but a process to be managed by politicians.

    That’s a lot more tolerable than Reason’s position that housing is something to be managed by DC bureaucrats.

  4. I’m sorry Mr. Sullum, wasn’t Reason a libertarian oriented publication at one time? Because you and your fellow travelers have transformed it into Pravda-lite.

    1. That’s an ironic statement considering the Marxist-Leninist influence on Trump’s trade and immigration policy.

      1. “That’s an ironic statement considering the Marxist-Leninist influence on Trump’s trade and immigration policy.”

        Trump’s full of it on tariffs, but you’re full of it pretty much everywhere.

    2. Free trade is not libertarian?

      1. Depends on how you define free trade. The reality is that the Chinese government drastically interferes with trade and to a lesser extent our government has since at least TDR’s term.

        1. So we need even more government interference to fix all that other government interference?

          1. Yes, Leo. Mr Nice Guy loses to Tit For Tat, but only when Tit actually happens.

            We’ve seen countries reevaluate the costs and benefits of screwing Americans with disproportionate tariffs and subsidies. I had thought China was recently agreeing to relaxation of their restrictions on US imports because of this.

            It will mean though that prices for goods and services might rise in the US. Which violates the First Commandment of Reason and CATO.

            1. No it violates every tenant of economics:

              “The Truths of Free Trade
              Free trade increases prosperity for Americans—and the citizens of all participating nations—by allowing consumers to buy more, better-quality products at lower costs. It drives economic growth, enhanced efficiency, increased innovation, and the greater fairness that accompanies a rules-based system. These benefits increase as overall trade—exports and imports—increases.
              Free trade increases access to higher-quality, lower-priced goods. Cheaper imports, particularly from countries such as China and Mexico, have eased inflationary pressure in the United States. Prices are held down by more than 2 percent for every 1 percent share in the market by imports from low-income countries like China, which leaves more income for Americans to spend on other products.
              Free trade means more growth. At least half of US imports are not consumer goods; they are inputs for US-based producers, according to economists from the Bureau of Economic Analysis. Freeing trade reduces imported-input costs, thus reducing businesses’ production costs and promoting economic growth.
              Free trade improves efficiency and innovation. Over time, free trade works with other market processes to shift workers and resources to more productive uses, allowing more efficient industries to thrive. The results are higher wages, investment in such things as infrastructure, and a more dynamic economy that continues to create new jobs and opportunities.
              Free trade drives competitiveness. Free trade does require American businesses and workers to adapt to the shifting demands of the worldwide marketplace. But these adjustments are critical to remaining competitive, and competition is what fuels long-term growth.
              Free trade promotes fairness. When everyone follows the same rules-based system, there is less opportunity for cronyism, or the ability of participating nations to skew trade advantages toward favored parties. In the absence of such a system, bigger and better-connected industries can more easily acquire unfair advantages, such as tax and regulatory loopholes, which shield them from competition…”
              https://www.mercatus.org/publications/trade-and-immigration/benefits-free-trade-addressing-key-myths

              Notice nowhere in there is there any requirement that the other party offer ‘free trade’; it they wish to burden their population with tariffs, who cares?
              This is all about burdening the US population with OUR tariffs.

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  6. Look, free trade is alright as a principle, but when China is eating our lunch because their central planning is obviously so superior to our decentralized authority, then obviously we need to be central planners as well. We can’t afford to let people make their own choices at this time, we must all work together for the good of the collective. It’s a fine and noble thing to sacrifice for the good of the State, to set aside your own interests for the common good. Now quit complaining and get in the goddamn barrel.

    1. As I’ve said many times, government is basically a process for building a perpetual-motion machine and elections are contests between competing ideas on how best to build that perpetual-motion machine. Those of us who understand perpetual-motion machines have no interest in getting involved in that process and it leaves the field to the morons. Government simply cannot solve all your problems, but nobody who understands that stands a chance in hell of getting elected, only those who promise that they know exactly how government can solve all your problems are going to get elected. They’re all statists to one degree or another, they all believe that government is the answer to all your prayers.

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        1. The kind of substantive response I’ve come to expect from you.

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      2. Well said as usual Jerryskids.

        Government simply cannot solve all your problems
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  8. Except that the existing trade agreements we have are not free exchanges of goods but are processes managed by politicians. You may decry that Trump’s proposed policies will not get the results he is promising for losses in free trade, but holding him to an ideal that does not actually describe how these agreements work in the real world is a bit baffling.

  9. Freedom means asking permission and obeying commands.

  10. ORANGE MAN BAD! BAD, I SAY! LISTEN TO ME!!!!

    1. Orange Man bad?!? He BAD, all right! He SOOO BAD, He be GOOD! He be GREAT! He Make America Great Again!

      We KNOW He can Make America Great Again, because, as a bad-ass businessman, He Made Himself and His Family Great Again! He Pussy Grabber in Chief!

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      All Hail to THE Pussy Grabber in Chief!!!

      Most of all, HAIL the Chief, for having revoked karma! What comes around, will no longer go around!!! The Donald has figured out that all of the un-Americans are SOOO stupid, that we can pussy-grab them all day, every day, and they will NEVER think of pussy-grabbing us right back!

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      1. More cut and paste from Squirrelly. Unoriginal gibbering moron that he is.

  11. The great irony is that the more economic control exerted, the less plunder there is for the state to take.

    They used to understand that allowing economic freedom grew the pot that they stole from. Now they are just nihilists…

  12. Now, I want free trade. Unfortunately that isn’t the world we live in today. The Chinese Government doesn’t allow free trade. I wish it did. I am not a fan of government managed trade but I also am pragmatic enough to realize free trade with China, as long as the CCP remains in power is not going to happen. Now the choice is we either ignore China’s duplicity and continue as we did for decades or we try to change the dynamics. Neither one is a win from a Libertarian it free trade perspective. Pretending otherwise is just Pollyandish thinking.

    1. I don’t care what the CCP loads on their population. I don’t want the US gov’t to load us with the same.

  13. “He would use immigration law to “prohibit American companies from replacing United States citizens with lower-cost foreign workers.”

    In my workplace 90% of the new hirees are from one particular country. Want to guess which one? (think tech). Even though they go on and on about diversity in the workplace, this one nationality is dominating the new hires.

    1. It gets worse alco, when—and this may be true already in your company—said ethnicity gains control of hiring and firing. Racism when practiced by a minority is, “mentoring”, “giving a helping hand”, “just wanting to work with people s/he’s comfortable with.”

      When a white guy tries it, the EEOC stomps on his dick. Good luck.

  14. We all agree that protectionism ultimately bad for the economy. Like all things life, free trade shouldn’t be discussed in a vacuum.

    There is no true free trade. If America doesn’t slap tariffs on Japanese exports but Japan does for our exports, then the arrangement becomes crooked. That we have to come up with “trade deals” that specify the products being exchanged and or what restrictions / tariffs are to be eased reflect certain realities.

    Trade deficits barely tickles America because we’re a global producer of social media, energy, raw materials, fashion, agriculture, etc. We practically feed and cloth large parts of the world.

    But at a certain level, Americans will start to complain about disparity. We buy a lot of Asian cars, but Japan and Korea doesn’t buy our cars. People can feel jobs and production being outsourced, and the fact that you can buy Chinese assembled toasters at a cheap price is a small consolation.

    Trump has expressed interest in a no tariff trade deal, which neatly meets both the “America first” and free trade criteria. The problem is that almost no one agree with it, knowing what that would do to THEIR market.

  15. Free trade doesn’t exist and hasn’t since WWI. In theory very easy…you don’t subsidize, we don’t subsidize, no tariffs on ether side and neither peg to each other’s currency (better both sides use gold as the exchange medium). Let’s see..China subsidies goods (and so do we-import/export bank anyone), both sides have tariffs, and China pegs to our currency. This has all helped the elites on both sides..China’s commies can industrialize and keep those pesky peasants from the country busy after they shipped them to factory cities..and Washington? Well the politicians need someone to buy the inflated currency to offshore inflation and fuel big govt by buying our debt. Sorry Jake..I’ll take Trump over the Council of Forieign Relations and the Keynsian High Priests/Rabbis at the Fed. F them

    1. “Free trade doesn’t exist and hasn’t since WWI…”
      Not a reader of history, I see.

      1. Spoken like someone who has never looked at the NAFTA “Free Trade” agreement.

  16. Minneapolis is getting looted again because some dumbass killed himself.

    1. We really do need to do something about our democrat problem.

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