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… is from page 213 of Menzie Chinn’s and Douglas Irwin’s superb 2025 textbook, International Economics:

The past few decades have been an era of globalization. Most countries have moved to reduce trade barriers and take advantage of growing world trade. How have they done so? One way a country can reduce its tariff and non-tariff barriers is simply to act unilaterally. A unilateral tariff reduction occurs when a government decides to reduce its import duties on its own, independently of other countries. In recent years, many developing countries have chosen this path. When China, India, Vietnam, and other Asian countries opened up to world markets, they did so based on domestic political changes in favor of economic reforms, including a more open trade policy.

DBx: Yep.

Contrary to the claims of many protectionists, these Asian economies did not grow because of protectionist measures but, rather, only when they, largely on their own, reduced their protectionist measures. Nor did the growth of these countries’ economies occur at the expense of the United States. Americans grew richer as the people of these countries grew richer.

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This letter of mine – available here by scrolling down – will appear in the print edition of tomorrow’s (September 4th’s) edition of the Washington Post:

Regarding the Sept. 2 news article “Treasury secretary downplays bond market concerns”:

Treasury Secretary Scott Bessent described the sentiment of all but one of the members of the Group of 20 Tuesday, saying that “we believe that non-market-based economies pushing out a never-ending stream of cheap exports is not sustainable.”

Bessent’s correct that the continued exportation of goods at prices below cost is unsustainable. But it’s unsustainable for the exporting countries, not for the United States.

Americans are enriched by the opportunity to purchase goods at prices that are partly subsidized by foreigners. There’s nothing unsustainable about our ability to buy and consume such goods.

What’s unsustainable is foreign companies’ ability to continue to sell their exports to us at prices below costs. If foreign companies are indeed engaging in this self-destructive folly and, as Bessent seems to think, are intent on persisting in it, they will eventually transfer all of their wealth to us. They’ll then no longer be able to afford it, and so it must end. But the resulting damage falls on foreigners, not on Americans.

True champions of a “put America first” policy should cheer, not jeer, foreign companies’ determination to sell exports to Americans at prices below cost.

Donald J. Boudreaux, Fairfax

The writer is an economics professor at George Mason University.

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Daniel Hannan, Director-General of the Institute of Economic Affairs, righty criticizes J.D. Vance’s clueless hostility to economics and free markets. Two slices:

JD Vance is the latest postliberal to embrace what is now, for all intents and purposes, an anti-growth position.

In his latest book, Communion, Vance inveighs against those perennial straw men, the GDP-obsessed economists. We keep hearing about these mysterious figures, cold-hearted calculators who believe that GDP is the only measure that counts. Oddly, despite running the world’s foremost classical liberal think tank, I have yet to meet one.

Vance, though, is convinced that people who “struggle to put a value on anything that can’t be specifically measured” not only exist, but run America. The country is governed, he tells us, “by numbers on a spreadsheet and the people who built those spreadsheets.”

He goes on to write, with the air of a man imparting an original insight, that looking after your children is more fulfilling than adding to GDP. Well, yes, obviously. Whom does he imagine disagrees? Economists, practitioners of what Vance, unconsciously quoting a pro-slavery tract, calls “the dismal science,” will point out that higher living standards — higher GDP, if you insist — frees up time to play with your kids, because you no longer need to work six days a week just to feed them. But no economist, indeed no parent, has ever argued that you get more pleasure from a large bank balance than from reading a bedtime story.

We are used to hearing degrowth rhetoric from the extreme Left. To hear it from a leading figure in the main right-wing party — Vance is said to have locked down big donors and the Republican National Committee in advance of the next presidential election — is extraordinary.

Large chunks of what are still sometimes called the Right have adopted radical socialism: NatCons, Groypers, integralists and a mass of the MAGA rank-and-file. While much of the democratic world has seen a political realignment, in which culture displaces economics as the chief division, this development makes the United States an outlier.

…..

I suspect that Vance’s real game is to depreciate the whole concept of economic growth because several of the policies he favours, notably on trade, will reduce it. If free trade is the last idea that unites every economist, then, for Vance, the entire profession must be flawed. Or as the vice president puts it in his book, “Maybe economics is just fake.”

Charles Calomiris reveals “the hidden lesson in the history of the Lucas Critique.” Two slices:

The reason contributions to economic thinking can be the butt of such jokes is that they are formalizations of ideas that in some sense we already knew. But formalizations can be important because they show not just that intuition is right, but exactly why it is true, that is, how its truth emerges from and fits into a broader way of thinking about the world. In the process, the logic of many related truths that weren’t so clear are also brought to light.

In the case of the Lucas Critique, its author pointed out that rules of thumb about economic behavior from the past are subject to change if policy circumstances change. The way people set prices for their goods and labor in the market, for example, depends on their expectations of the prices of other goods and services they will have to buy. Past patterns of behavior in price and wage setting may not persist if policies change, and if those changes make people see that they will need to change their price setting behavior accordingly. For example, if an observable expansionary monetary policy causes people to expect prices in general to rise, everyone will be more demanding in the prices they charge for their own goods and services.

Or as Robert Lucas put it in his influential 1976 Carnegie-Rochester volume paper, Econometric Policy Evaluation: A Critique: “Given that the structure of an econometric model consists of optimal decision rules of economic agents, and that optimal decision rules vary systematically with changes in the structure of series relevant to the decision maker, it follows that any change in policy will systematically alter the structure of econometric models.”

The example that Lucas had most in mind was monetary policy’s effects on employment and real output. What we now call “the great inflation” of the 1960s and 1970s was front of mind in 1976. Today it is viewed as a colossal, persistent policy error. Students learn that the cause of the great inflation was that when our government increased its spending (both to fight the Vietnam War, and to achieve the ambitious domestic agenda of the Great Society objectives) the Federal Reserve accommodated the rising deficits by expanding its purchases of government debt, which produced accelerating inflation.

…..

The many years of denial in the 1960s and 1970s may be the most important lesson we should learn from the history of the Lucas Critique. That self-serving reluctance to learn from economic facts and logic seems as present today as it was then.

The Trump Administration says that trade deficits are evidence that a country is being abused by others and that tariff policies will promote growth by substantially onshoring the global supply chain. Both those claims ignore a vast theoretical and empirical literature in economics. That literature shows that trade deficits today mainly reflect the desire of foreigners to invest in the US. And economic evidence is unanimous in showing that tariffs harm growth by limiting our pursuit of comparative advantage in supplying some goods and services.

The Editorial Board of the Washington Post asks: “State control over oil broke Venezuela. Why is Trump doubling down?” A slice:

President Donald Trump’s removal of socialist dictator Nicolás Maduro in January offered a generational opportunity to counteract the failures of Venezuela’s socialist policies. A pro-America opposition appeared ready to usher in a free market and end the state’s suffocating grip on oil production. Eight months later, the White House’s deal with Maduro’s former vice president risks entrenching the people and policies that tanked the country’s economy in the first place.

And Reason‘s Eric Boehm writes that “Trump’s Venezuela oil deal sells out democracy and free markets.” A slice:

Under the terms of the deal announced by the White House on Monday, the government will hold a 35 percent stake in North American Blue Energy Partners, previously the second-largest private oil producer in Venezuela. The federal government will also hold “veto power over the appointment of any member of” the company’s board of directors, the White House announced.

This is a rather shocking expansion of the state corporatism that the Trump administration has mainstreamed into American politics. Now, in addition to owning stakes in more than two dozen American companies, the Trump administration is giving the federal government direct control over an oil company that will operate in a foreign country while competing with other American and international firms.

It is effectively the “American nationalization of Venezuelan oil,” as National Review termed it. The Trump administration has apparently decided it can solve socialism in Venezuela by…doing socialism in Venezuela.

Meanwhile, the deal also seems likely to create additional hurdles to the democratic transition in Venezuela—a country that is still officially governed by socialist Delcy Rodríguez, Maduro’s second-in-command, who was appointed as interim president by the Trump administration in January.

Writing about Republicans from midwestern farm states, National Review‘s John Puri describes them as “conservatives in the sense that they seek to conserve FDR’s system of farm socialism. Nowhere is this clearer than on ethanol.”

Michael Segal writes informatively about U.S.-Canada trade relations. A slice:

There are numerous discrete problems in U.S.-Canada trade. Canada has a dairy quota, and the U.S. is reluctant to buy Canadian aluminum even though Quebec can produce it inexpensively using hydroelectric power. These can be solved easily. The big problem is the Segal issue—which is named for a cousin of mine.

The Segal issue held up the 1993 North American Free Trade Agreement for months. Publicly it was called the “textile issue,” but in private the negotiators called it the “Segal issue.” Most of the dollars involved a Canadian manufacturer of men’s suits, Peerless Clothing, which was led, after my father’s death, by his first cousin Alvin Segal.

The problem was that Peerless could import fine Italian cloth duty-free to Canada and make it into suits that could be sold in the U.S., undercutting American manufacturers, which faced U.S. tariffs if they imported the same cloth.

The Nafta negotiators worked around this problem by giving Canadian manufacturers a break from Nafta tariffs according to their existing shipments to the U.S., much of which accrued to Peerless. A more elegant repair came in 2001, during the final days of Bill Clinton’s presidency, when the Commerce Department dropped duties on importing Italian cloth to the U.S., leveling the playing field for Canadian and U.S. manufacturers. When the U.S.-Mexico-Canada Agreement replaced Nafta in 2020, Alvin thought the new changes were also wise.

Today, the same issue—different tariffs on imported inputs from other countries—is the core problem between Canada and the U.S. The problem has re-emerged because President Trump has reversed Bill Clinton’s approach and raised tariffs on a vast number of items. That creates a huge flurry of Segal-like issues in many different sectors of manufacturing and trade. There are so many tariffs that differ between the U.S. and Canada that fair trade between the two countries has become overly complicated to achieve.

Mr. Trump may prefer to solve the issue by demanding that Canada raise and lower tariffs in tandem with America. Ottawa wouldn’t accept that. It would be a huge affront to Canadian independence, and it would inflict on Canada the chaos of frequent U.S. tariff changes.

The most sensible approach would be to emulate Mr. Clinton and eliminate most tariffs, with exceptions for national security. As a dual Canadian-American citizen I could imagine friendly Canadians and Americans agreeing jointly to such a plan. Yet even though Mr. Trump thinks so highly of Canada that he has offered it statehood, his enthusiasm for tariffs is greater.

Bill Saporito rightly call Trump’s tariffs punitive taxes on Americans who buy aluminum from Canada “nuts.” Here’s his conclusion:

It’s not cheating when Canadians undersell American aluminum producers. It’s an advantage. It’s logical for the United States to import lower-cost Canadian aluminum and invest in industries in which America enjoys its own advantages — chip design and artificial intelligence, for instance.

Who would flout this logic, trashing a 150-plus-year relationship with a close ally in a disruptive attempt to separate two interdependent economies? Oh, right.

John Stossel reports on the failure of rent control in St. Paul, Minnesota.

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… is from page 179 of David Friedman’s superb 1996 book, Hidden Order:

A capital inflow occurs because foreign investors can get a higher real interest rate here than at home. If the reason the interest rate is high is, as sometimes asserted, that Americans have become increasingly impatient, unwilling to give up present utility for future utility, then it is a symptom of a change that will ultimately make us poorer – we are living on future income and some day the bill will come due. If the reason is that American firms have lots of good investment opportunities, and are therefore happy to offer higher rates than Japanese firms, the bill will still come due, but we will have the returns from those investments to pay it with.

DBx: Yes.

Note that Friedman here writes only of foreign investments incoming to the U.S. made as loans to Americans. Many other foreign investments incoming to the U.S. are not loans; on these investments, nothing ever need be paid back by Americans. An example is a German company building and operating an automobile-producing factory in South Carolina. The shareholders of this firm of course expect to profit, but if the firm fails, the losses are borne by that company’s shareholders and not by Americans. And if that firm succeeds, the positive returns to the shareholders are newly created wealth that would never have existed absent this investment. These returns, in essence, are paid by these shareholders to themselves (despite the fact that international commercial accounting creates the appearance that these returns to foreigners are paid by Americans).

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Until recently I did the following such calculations ‘by hand,’ but I recently realized that ChatGPT can reliably perform these calculations accurately and much more quickly than I am manually able to do so. So this morning I asked ChatGPT to compare the performance of each of the three major U.S. stock-market indices so far during Trump 2.0 (since election day 2024) to their performance over the same time period during Trump 1.0. Remember, Trump 1.0 – although featuring some tariff hikes – gave us nothing like the trade-policy uncertainty and massive tariff hikes of Trump 2.0. Remember also that during Trump 1.0, AI wasn’t much of a thing.

Here are the results of my AI-assisted research:

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National Review‘s John Puri is right: “We don’t need a strategic petroleum reserve.”

The Editorial Board of the Wall Street Journal applauds the reality-signal now being broadcast by the bond market. Here’s its conclusion:

But overall the return to normal debt markets is a good development. U.S. debt held by the public at 100% of GDP is a problem, and on present trend it will get worse. Interest on the debt is now $1 trillion a year, more than the defense budget, and growing. Neither party in Washington is willing to reform the runaway entitlements that are driving the debt.

The bond vigilantes aren’t yet in full cry, but their early murmurs are welcome. They are sending a message to Washington and other Western nations to clean up their fiscal acts. Bond investors may be the only people who can force the politicians to pay attention. The real worry is if the politicians don’t listen.

GMU Econ alum Dave Hebert ponders trade-war strategies.. A slice:

But leverage is not measured by how large your market is. It’s measured by the other party’s next-best alternative. Every time Canada, Europe, Japan, or Britain signs a new trade agreement, that next-best option improves and lowers the cost of saying no to Washington.

This is what tariff strategists and their defenders keep missing. Tariffs can work as a negotiating tool only if two conditions are met. First, the other country must have something it can do to make the tariffs go away. Second, they must not have viable alternatives. If the rules and justifications for tariffs keep changing, if the list of demands keeps expanding and shifting, and if compliance today does not mean predictability going forward, the only rational response is diversification.

And that is exactly what the G7 have been doing.

But while Washington was raising tariff rates on friends and foes, the rest of the G7 has been busy signing new agreements around the world. In January, the European Union concluded its agreement with Mercosur, linking 700 million consumers and saving European firms €4 billion ($4.7 billion) per year in duties once it is fully in force. Shortly thereafter, the EU finished a free-trade agreement with India, which will cut Indian tariffs on 96.6 percent of EU exports.  And in March, the EU completed another deal with Australia and signed a security and defense partnership on top.

Jim Bacchus describes other countries’ diversifying their trade away from the U.S. as “the other Liberation Day.” Two slices:

As the United States under President Donald Trump endeavors to coerce international trading partners through the employment of economic leverage to address both its trade and non-trade concerns, those trading partners, more and more, are simply circumventing the United States.

…..

In all this, and much more, the current transformation of international trade positions the United States on the outside looking in—and likely to watch its already-middling share of global exports shrink even more in the years ahead. US trade policy has increasingly turned the country from a paragon of international trade into a pariah and a market to be avoided, if at all possible. The distinguished international trade economist Robert Lawrence has asserted that President Trump’s trade policies are helping “create a world without America.” This stark assertion may edge a bit toward exaggeration, though less and less so as time passes. What can be stated with increasing certainty is that the protectionist trade policies of Donald Trump, ever in flux, are making it less likely that archaeologists 5,000 years from now will identify the geographical center of 21st-century world trade as being in the United States. To avoid this fate, the US must return to its long-standing policy of freeing trade and establishing and upholding the international rule of law in trade. This should be done through regional agreements, if need be, but preferably within the multilateral legal structure of the World Trade Organization, a vital international institution for which President Trump has so far expressed only contempt.

David Henderson, writing in the Wall Street Journal, makes a powerful case that “California’s wealth tax would spare no one.” A slice:

We’ve seen this before. After the 16th Amendment authorized the federal income tax, it started small. In 1913 the tax rate on married couples filing jointly was 1% on income up to $20,000 (equivalent to some $674,000 today). The top rate was 7%, on income above $500,000 ($16.8 million today). Five years later, in the midst of World War I, the rate was 6% on income up to $4,000 and 77% on incomes over $1 million.

Under Presidents Warren G. Harding and Calvin Coolidge, and with the urging of Treasury Secretary Andrew Mellon, Congress brought rates down substantially at all income levels. But the lowest level they reached, in 1928, was still much higher than in 1913: 25% for incomes over $100,000, and 1.5% to 9% on income up to $20,000.

Then World War II brought higher rates again at all levels. Tax rates on lower incomes were high: 23% on income up to $2,000. Before World War II, the income tax was thought of as the class tax—a high tax on high-income people. In World War II, it became a mass tax.

There’s a lesson here. If you vote for a measure to tax the very wealthy, you might find yourself paying rates even above those meant for the very wealthy. Proposition 40 has the potential to become a stealth tax on all Californians.

Reviewing Unconventional Education and America’s Founding, edited by Nasiyah Isra-Ul at the Foundation for Economic Education, Laura Williams offers much-needed wisdom about education in the U.S.

Let’s hope that Christian Britschgi is correct when he argues that data centers will be saved by federalism…. And perhaps he is!

Here’s the abstract of a new paper by J. Carter Braxton, Kyle Herkenhoff, Chengdai Huang, Michael Nattinger, Jonathan L. Rothbaum, and Lawrence D.W. Schmidt:

We document an increase in U.S. income risk from 1969 to 2019 using newly digitized IRS tax returns, distinguishing permanent from transitory risk. Since the 1970s, permanent income risk increased across the distribution, but most sharply among high earners, rising nearly 70% among the top 5%. We show that, even among top earners, large negative income shocks strongly predict financial distress and higher income risk is linked with higher savings. In a quantitative life-cycle model, rising income risk concentrated at the top lowers the risk-free rate by 0.7pp, increases wealth inequality, and contributes to the “savings glut of the rich.”

Jeffrey Williamson has died.

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… is from page 12 of Thomas Sowell’s 1993 book, Inside American Education (footnotes deleted):

An international look at per-pupil expenditures likewise gives the lie to claims that more money produces better education. Despite claims that money is needed to hire more teachers to relieve “overcrowded classrooms,” the United States already has a smaller average class size than a number of countries whose educational achievements are higher. Japan, for example, averages 41 students per class, compared to 26 for the United States. In mathematics, where the performance gap is especially glaring, the average class size in Japan is 43, compared to 20 in the U.S. Within the United States, the ratio of pupils to teachers declined throughout the entire era from the 1960s to the 1980s, when test scores were also declining.

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Here’s a letter to Foreign Affairs.

Editor:

Michael Pettis continues to stir up unwarranted fear of “trade imbalances” (“A Great Rebalancing Is Coming,” August 28). Although the global economy is indeed beset by government-created flaws destined to cause problems, so-called “trade imbalances,” as such, are not among these flaws. The fact that Mr. Pettis insists otherwise reflects his failure to understand that countries that run trade deficits do not thereby necessarily go further into debt, and that the capital stock can and does grow both for the world and for many trade-deficit countries, including the U.S. When a country, such as the U.S., regularly attracts foreign investment mostly to create and enhance enterprises in that country – rather than to fund consumption – that country’s productivity and prosperity grow even as it continues to run “trade deficits.” There’s no reason this process must ever end or be anything other than enriching for the people of the country.

But Mr. Pettis doesn’t get it. He stumbles immediately by writing that “for an advanced, capital-rich economy such as that of the United States, an enduring trade deficit will bring with it either rising unemployment or rising debt, neither of which is sustainable.”

Well.

The U.S. has run annual trade deficits every year, without fail, starting in 1976 – that is, for 20 percent of the country’s existence. And yet the U.S. unemployment rate is today 4.1% – less than half its rate of 8.5% in 1975 (the last year the U.S. ran an annual trade surplus).

As for debt, while it’s gone up in total, it’s gone down relative to the value of assets owned by American households – which is the relationship that matters for assessments of the sustainability of debt. At the end of 2025, the average net worth of an American household was $1,034,665. This figure includes each household’s share of federal, state, and local government debt. In inflation-adjusted terms, that’s a net worth 205% higher than in 1975.*

And, by the way, so too has the real net worth of the median American household risen. The economist Jeremy Horpedahl calculates that the real net worth of the median U.S. household in 2022 was 119% higher than in 1983 and 171% higher than in 1969.**

These facts alone belie Mr. Pettis’s belief that trade deficits necessarily drain wealth from countries that run these so-called “deficits.”

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

* To calculate this figure I updated the figures I reported in this March 19^th, 2026 Café Hayek post.

** Private correspondence from Horpedahl. These figures will appear, with appropriate references and citations, in Bryan Caplan’s and my forthcoming book, Blockade: The Science and Ethics of Trade (Cato Institute, 2027).

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The Wall Street Journal Editorial Board decries the unwarranted hysteria over data centers. A slice:

It’s true the AI industry has hurt its own cause by fueling speculative anxiety about mass unemployment. AI developers have also failed to explain how data centers benefit local communities. But the larger failure has been the lack of political leadership in explaining the technological and economic transition now underway and how to address it.

On data centers, there’s a strong case to be made. The U.S. has more than 5,400 data centers, which are the backbone of the internet and power the apps on your smartphone. Data centers enable Zoom meetings, online food deliveries, video streaming, instant retail stock trading and more. If data centers went dark, so would the modern economy.

New large-scale data centers are needed to train and run AI models, and more than chatbots. Businesses large and small use AI to boost productivity, which lets them pay workers more. Steel maker Cleveland-Cliffs recently announced an upgrade to an Ohio plant that will incorporate AI to improve efficiency.

Utilities use AI to prepare for natural disasters and reduce power outages. AI models are helping diagnose cancer at earlier stages and develop cures. Data centers bring high-paying construction jobs, and skilled blue-collar workers are needed to run them.

The Washington Post‘s Editorial Board continues to warn of the ill consequences of the U.S. government’s fiscal incontinence. A slice:

Politicians need to take their obligations to bondholders seriously because they won’t be able to do anything else if they don’t. A hugely indebted government can spend only at the pleasure of its lenders. As interest costs crowd out spending on the essential stuff that government is supposed to do, voters will become increasingly upset as they sense that their taxes aren’t being spent for their benefit.

Debt can be sensible. When private borrowers take on debt, they are mostly doing it to fund an investment. They hope the investment will create a return that exceeds the costs of borrowing. And then when the debt is paid back, a beneficial, productive asset remains.

Some U.S. government borrowing is like that, when funding infrastructure projects or education. But the vast majority of federal borrowing funds short-term consumption, primarily for seniors, over long-term investment.

The government’s “return” on such short-term spending is negligible, and the money it must borrow to fund those expenditures is money that cannot be borrowed by private individuals or businesses to make productive investments.

That hurts economic growth, which hurts job growth, which hurts household incomes, which fuels political demand for more welfare programs to help people who are struggling, which will require even more debt, which borrowers won’t be willing to lend unless interest rates are higher.

GMU Econ alum Romina Boccia and her co-autho Ritvik Thakur tell a scary but true story about Medicare.

Peter Earle explains what shouldn’t – but, alas, what nevertheless does – need explaining: “By suppressing yield signals, bond bureaucrats may summon the very bond vigilantes they hope to suppress.”

Stephanie Slade criticizes “the postliberal right’s frenzy for exaggerating and fabricating transgressions.”

Eric Boehm describes Trump’s trade war with Canada as “costly, absurd, and unfunny.” Two slices:

As the Trump administration escalated its trade war with Canada last week, the White House’s official Twitter account shared a photo of a bald eagle tackling a Canadian goose.

The intended message was not exactly a subtle one.

But the post did illustrate how the administration views America’s economic relationship with Canada, and how President Donald Trump thinks about international trade more broadly: as a win-or-lose struggle in which America must bully its trading partners and fight its allies, lest they keep “ripping us off.”

That logic completely unravels if you think about it for more than a minute. American consumers and businesses are being taken advantage of by Canadians who…are offering to sell us aluminum, oil, and wood while buying our farm goods, machinery, and ethanol? Americans and Canadians trade hundreds of billions of dollars’ worth of goods every year in voluntary, mutually beneficial transactions.

But Trump doesn’t want to think about it for more than a minute. He wants a fight for the sake of a fight, and the details don’t matter.

…..

The mistake there may be in assuming that Trump wants a deal at all. There is little indication that he does.

At one point during recent negotiations, The New York Times reported, American officials said the U.S. “would retain the power to change tariff policy against Canada at any time, irrespective of the agreement.”

What good is a deal that’s subject to be changed at whim? It’s hard to blame Canadian Prime Minister Mark Carney for rejecting that ridiculous proposal.

Even before that, Carney had good reason to be distrustful. After all, the two countries had a deal—the United States–Mexico–Canada Agreement (USMCA), which Trump negotiated and hailed as “the best agreement we’ve ever made” during his first term.

Trump decided to tear up that deal because he wants a fight—even a nonsensical one that will harm American consumers and businesses—more than he wants trade with Canada. (By retaliating against Trump’s foolishness, Canada is compounding the error. As J.D. Tuccille wrote last week, Canada ought to pursue a policy of unilateral free trade, rather than hurting its own people in a showdown with Trump.)

Also critical of Trump’s trade war with Canada is Ramesh Ponnuru, calling it “multifaceted stupidity.” Two slices:

The trade war weakens the United States in relation to China. Optimists believe Trump is trying to force Canada to adopt its own stringent tariffs against China. Even if that were the right tool for an international coalition to use to weaken the Chinese government or improve its behavior, simultaneously attacking Canada over everything from its dairy policy to its existence as an independent nation is no way to build that coalition. Canadian Prime Minister Mark Carney’s musings about drawing closer to Beijing may not be wise, but they are predictable.

…..

The trade war is increasingly based on absurd complaints. Canada maintains some protectionist policies that harm American producers (and Canadian consumers), much as the U.S. engages in some protectionism against Canadian businesses. Yet the two nations largely practice free trade with one another. Scott Lincicome of the Cato Institute calculates that 99.85 percent of cross-border trade was duty-free before Trump started his trade war. The president called his first-term deal with Canada and Mexico “the largest, fairest, most balanced, and modern trade agreement ever achieved.”