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Here’s a letter to the Washington Post:
You report that Donald Trump tweets: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax” (“Trump targets GM in latest attack on automakers, while Ford cancels plans for a Mexico plant [2],” Jan. 3).
Forget that such protectionism, by raising U.S. automakers’ costs of production, will reduce these firms’ outputs and abilities to compete with foreign automakers – and that this government-imposed inefficiency might well destroy more jobs in the U.S. auto industry tomorrow than are created by this tariff threat today. Also forget that such protectionism, by raising the prices that Americans pay for automobiles, will oblige Americans to save less as well as to spend less on other goods and services, thus artificially destroying jobs in other industries. In short, forget Mr. Trump’s appalling ignorance of the economics of trade.
Instead, focus on the ethics of the matter. Suppose that Mr. Trump is your neighbor and that he complains that the auto mechanic who you regularly hire is from another neighborhood. So he threatens to have his bodyguards confiscate a portion of your income until and unless you hire a more-pricey mechanic from your immediate neighborhood. Would anyone excuse such unethical – indeed, predatory – behavior? Of course not. So what is it about such behavior that makes it excusable if it is simply carried out on a larger scale? Answer: nothing at all. This behavior, regardless of scale, is that of a thug.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030