Here’s a letter to a Cafe Hayek patron:
Mr. John R____:
Thanks for your e-mail seeking my “thoughts about the difference between Protectionism and Negotiation Tactics.”
My summary thought is this: a government practices protectionism whenever it obstructs its citizens’ freedom to trade. This reality isn’t altered even if government officials sincerely believe their obstructions to be part of “negotiation tactics” to lower global tariffs.
I understand that many people excuse Pres. Trump’s tariffs by alleging that these are clever negotiating tools. Let’s here forget that the evidence does not support the assertion that Trump will stick to his promises to lower U.S. tariffs when foreign governments accede to his trade demands. Let’s here also ignore the fact that the outcomes toward which Trump is negotiating – an increase in American exports relative to American imports, and decreases in U.S. trade deficits – are outcomes that would make us less rather than more prosperous.
Instead, inquire into the ethics of the matter: even if we grant that Americans in the aggregate would be made better off if non-Americans trade with us more freely, should flesh-and-blood individuals be used as pawns in games of strategy played by government officials? I answer no.
Suppose that officials in Beijing have a personal dislike of you and that Trump knows of this dislike. Trump then negotiates with Chinese officials by promising, in exchange for them cutting tariffs, to triple your tax bill each year for the next five years. Suppose further that Beijing agrees to slash tariffs on American goods sold in China in exchange for Trump carrying through on his promise to inflict arbitrary economic harm on you and your household. Finally suppose, not unreasonably, that the result is net economic gains to Americans as a group.
Would you think this negotiation tactic ethically acceptable? Surely not. And yet despite several superficial differences with the real-world case, my hypothetical example is relevant in its essence. In both reality and my hypothetical, the U.S. government intentionally makes some individual Americans poorer and less free in order to increase the incomes of other Americans. In both cases, the fact that by conventional measurements the aggregate wealth of Americans is thereby increased does not justify the government’s intentional abuse of some Americans.
In the real-world, Trump intentionally abuses some Americans to drum up business for other Americans. In the real-world, Trump uses actual flesh-and-blood Americans as pawns in his ‘negotiations.’ Even if the result turns out to be a lowering of global tariff rates, this result could have been achieved with behavior far less unethical through WTO negotiations – a process that Trump ridicules and, in doing so, reveals as farcical the assertion that his ultimate goal is a world of freer trade.
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
