Below is another open letter to White House trade advisor Peter Navarro:
6 March 2018
I call your attention to yesterday’s review, in the Wall Street Journal, by Peter Neville-Hadley of Carl Minzner’s book, End of an Era (“China’s Own Worst Enemy,” March 5). This book argues – apparently convincingly – that China’s current rulers are reversing the market-liberalizing policies that began under Deng Xiaopeng. Here’s an example from Mr. Neville-Hadley’s excellent review: “Mr. Minzner does demonstrate that China’s rapid growth and openness to the outside world are now coming to an end. Inefficient state-owned enterprises are privileged at the expense of private firms….”
In light of this reality – and because of your long-time insistence that our government must use tariffs to protect us Americans from the market distortions caused by Beijing’s economic interventions – will you now propose that Uncle Sam subsidize American imports from China? After all, because Beijing is now doubling down on supporting inefficient enterprises at the expense of more-efficient private firms in China, Chinese exports to America will increasingly become artificially costly. This fact means that we Americans will have access to less Chinese-made steel and aluminum, and to fewer Chinese-made textiles, tires, and other goods, than we would have were Beijing “playing by the rules” of a market economy.
Put differently, let us assume that you were earlier justified in your insistence that it’s our government’s duty to tax American purchases of Chinese goods in order to offset the market distortions that befell us from Beijing’s policies that made Chinese goods artificially more abundant on global markets. Should you not, therefore, now insist that it’s our government’s duty to subsidize American purchases of Chinese goods in order to offset the market distortions that befall us from Beijing’s policies that today make Chinese goods artificially more scarce on global markets?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
Note to Cafe Hayek readers: When the typical protectionist is confronted with questions that probe his intellectual and ethical consistency, he responds either with the blank stare of the uncomprehending or with outbursts of pointless accusations against those who pose the questions. I’ve not once gotten a substantive response to the question that I ask in the above letter. (Of course, I don’t really support such import subsidies.)