Here’s a letter to the Washington Post:
David Ignatius favorably quotes Treasury secretary Steven Mnuchin talking about trade with China (“Two cheers for Trump’s trade agreement with Mexico,” August 29): “We need reciprocal trade. . . . This can’t be a one-way transaction where they have free trade here and we have no trade there.”
What in the world is a “one-way transaction”? And how can we Americans trade with China if there is “no trade there”?
Because trade is exchange, by its nature trade involves two or more parties. Each and every trade that an American makes with someone in China is a trade that someone in China makes with an American. It follows that absolutely no government intervention is required to ensure that the amount of trade that we Americans have with the Chinese is always matched exactly by the amount of trade that the Chinese have with us Americans.
Mr. Mnuchin’s slapdash and sloppy talk about trade – the likes of which runs rampant throughout the Trump administration – reflects slapdash and sloppy thinking about trade.
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