All Talk of “Winning” and “Losing” at Trade is Daft
Here’s a Don Boudreaux letter to Club for Growth president David McIntosh:
I’m sorry, but for your happy interpretation of Trump even to begin to be believable he would have to evince an actual understanding of trade, an understanding of realities such as that imports are benefits and exports are costs paid to receive those benefits – that a U.S. trade deficit with the rest of the world does not mean that we are “losing” at trade – that a U.S. trade deficit with an individual country such as China is a meaningless phantasm – that all talk of “winning” and “losing” at trade is daft – and that the pattern of global supply chains is largely determined by comparative advantages, and that disruption of these supply chains with tariffs (and threats of tariffs) inflicts huge losses both abroad and here at home.
Yet Trump’s revealed ‘understanding’ of trade is precisely the opposite of these truths. Nearly every syllable out of the man’s mouth about trade expresses a fallacy. And so his words alone convince me that there’s no reason to believe that his ultimate goal is global free trade.
But since becoming president Trump’s got a record of more than words; he’s got policies. And these policies prove that his goal is not a world of “zero-zero tariffs.”
It’s dismaying that you and so many other conservatives today pusillanimously excuse Trump’s protectionist interventions – interventions that, were these inflicted instead by a Democrat, you would be among the first to denounce as the economic and ethical outrages that they in fact are.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030