Here’s a letter to the Wall Street Journal:
You correctly point out that Pres. Trump’s ignorance of trade leads to policies that reduce American exports (“Trump’s Pacific Trade Tear,” Nov. 11). But an even deeper problem with such policies is that they reduce American imports. This truth cannot be too often repeated: exports are costs incurred in order to receive benefits called “imports.”
If Trump were correct that exports are benefits and imports are costs, we Americans could become fabulously wealthy simply by loading all of our production onto ships and then sinking the ships in mid-ocean. Getting nothing from us, foreigners will send nothing to us. In fact, of course, as even a six-year-old child would recognize, such a trade policy would ensure our impoverishment.
Yet the trade policy championed by Trump differs from the sink-all-exports-in-mid-ocean policy only in degree and detail and not in kind. Trump is using his much-ballyhooed bargaining skills to arrange for us Americans to pay more to foreigners and to get less in return. The American president, in other words, is bargaining hard to make foreigners artificially richer by making Americans artificially poorer.
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
