Open Letter to Donald Trump

by Don Boudreaux on February 11, 2011

in Trade

11 February 2011

Mr. Donald Trump
New York, NY

Dear Mr. Trump:

Congratulations on your successful talk at the recent CPAC gathering.  Please, though, indulge me as I ask you a few questions.

You promise that, as U.S. President, you won’t raise taxes.  But you also promise to obstruct trade between Americans and the Chinese, presumably by raising tariffs.  Because tariffs are simply taxes on imports, you can’t avoid raising taxes if you raise tariffs.  So will you or will you not raise taxes?

You advocate, not free trade, but “fair trade.”  Can you define “fair trade”?  If I voluntarily buy from Mr. Lee and Mr. Lee voluntarily sells to me, can such an exchange ever be unfair?  Both parties to the exchange presumably gain, while the only people who lose are Mr. Lee’s competitors.  Given your claim that the billions of dollars worth of profits that you’ve earned are evidence of your own remarkable “intelligence and abilities,” surely you don’t wish to tilt the playing field in favor of domestic producers, for to do so would be to give these producers unfair advantages in winning the patronage of American consumers.  Any profits they make under such unfair circumstances wouldn’t be evidence of intelligence and ability but, rather, of political connections and monopoly power.  Wouldn’t such protection from competition be unfair?

You assert that “We are rebuilding China because we buy their products.”  What do the Chinese do with the dollars that we use to buy their products?  Do they burn these dollars or otherwise not use them commercially?  (If so, is that bad?)  If the Chinese do not burn their dollars, then they (or other foreigners with whom the Chinese deal) must use these dollars either to buy American products or to invest in the U.S. economy (or both).  To the extent that foreigners buy our products, by your reckoning they must be “rebuilding” America.  To the extent that foreigners invest in America, they are – what?  Do such investments harm America?  Does foreign investment in America not help to “rebuild” America?  If not, why not?

I’m interested to know your answers.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

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