- Cafe Hayek - https://cafehayek.com -

Why Not Take Trump at His (Many) Word(s)?

Tweet [1]

Here’s a letter to the Washington Post:

Marc Thiessen declares that “Trump is not a protectionist; rather, he is using tariffs as a tool to advance a radical free-trade agenda” (“Trump is using tariffs to advance a radical free-trade agenda [2],” July 27).

This declaration is completely unsupportable. To make it, Mr. Thiessen ignores the fact that every word about trade that has come over the past few decades from the mouth of Donald Trump reveals the president to be an unvarnished mercantilist. Contrary to what economically informed and genuine free-traders understand, Trump believes that countries compete against each other economically – that trade surpluses are evidence of a country’s economic success and that trade deficits are evidence both of economic failure at home and of nefarious trading practices abroad – that tariffs and subsidies implemented by foreign governments strengthen foreign economies at our expense – that exports are a benefit and imports are a cost – and therefore that government should arrange for the country to export as much as possible and to import as little as possible.

Although widely swallowed, each of these mercantilists beliefs is unalloyed nonsense.

And so Trump is willing to toy with the prospect of a tariff-free world because he wrongheadly thinks that in such a world we Americans will “win,” meaning that our exports will skyrocket relative to our imports and that we’ll run consistent trade surpluses. When these outcomes do not come to pass – and there is every reason to think that they won’t – Trump will conclude that a tariff-free world, after all, is undesirable. His lifelong commitment to mercantilism will then prompt him to unilaterally re-erect American trade barriers.

A truly radical free-trade agenda is one – such as was successfully followed in Great Britain for many decades beginning in the mid-19th century – in which the home government eliminates trade barriers regardless of the trade practices of other governments. Until and unless Trump is willing to follow this principled course, describing him as having a commitment to “radical free trade” is historically uninformed and insulting to Robert Peel [3], John Cowperthwaite [4], and the handful of other statesmen throughout history who in fact did have such a commitment.

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

Comments