First, trade has contributed substantially to the rise of American living standards since World War II. The report estimates those gains at $2.1 trillion on an annual basis, which was about 11 percent of the $18.5 trillion economy in 2016. Put differently, slightly more than one-tenth of what we produce and consume comes from trade’s cumulative benefits.
We enjoy these benefits in many ways. Imports are often cheaper than U.S. products. Think clothes, shoes, consumer electronics. Trade especially aids lower-income households whose budgets are weighted toward manufactured products, where price declines have been steep. Foreign competition and technology also force U.S. firms to lower costs and improve reliability. Cars are an excellent example. Toyota has made GM vehicles better. Finally, exports create jobs and economies of scale for U.S. firms.
All of this speaks to the greatest aspect of free trade: it’s the path to individual specialization. When global competition for customers brings down the cost of everything, rising disposable income leads to new wants in the marketplace being discovered, and with these new wants, new forms of work rise up as a necessary way of fulfilling the needs of consumers who desire all sorts of goods and services as a reward for their work. Free trade leads to lower prices, which lead to greater individual specialization, and by extension much greater productivity. When we’re more and more able to do the work most commensurate with our unique skills, our productivity surges.
David Boaz properly scolds those – and they are many – who mistake the president of one of the three co-equal branches of one of the multiple levels of one of the multitude of institutions in the United States as being “the commander-in-chief of the United States.” Here’s David’s conclusion:
Donald Trump is not my commander in chief. Neither was Barack Obama. Each was elected president, charged with leading the executive branch of the federal government.