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Repeating a Point

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Here’s a letter to a new reader of Cafe Hayek, Glenn Hobbs:

Mr. Hobbs:

Thanks for your e-mail.

You ask why I do “not give President Trump benefit of doubt that his tariffs are bargaining chips to make trade freer.”

My main reason – which is sufficient – for not swallowing the argument that Trump’s long-term goal is global free trade is that everything the man says about trade reveals him to be an economic nationalist of the most obtuse and cartoonish sort. Trump gives no evidence of understanding the first thing about trade.

Consider, for example, Trump’s indefensible claim that a U.S. trade deficit with another country, such as China, means that Americans are “losing” to that country [2]. In fact, a bilateral trade deficit means no such thing – because, in fact, a bilateral trade deficit has no economic meaning whatsoever. And if per chance – contrary to the lessons of history – Trump’s tariffs do lead to a global reduction in tariffs, a likely result would be increased U.S. trade deficits with the rest of world and, certainly, with many of the individual countries with which we trade. Upon observing this outcome Trump would conclude that global free trade – despite it being, in fact, a boon to America – is a curse to America. He would immediately slap on more tariffs.

In short, there’s no more reason to believe claims that Donald Trump is really a free trader at heart whose hyperactive protectionism is meant to strengthen free trade than there is to believe claims that Elizabeth Warren is really a “capitalist to her bones [3]” whose hyperactive interventionism is meant to “strengthen capitalism.”

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

……

Commenting on this letter [4] over at Facebook, the great Johan Norberg writes:

Quite right, and he’s said it many times, here for example: ”President Donald Trump rejected a European Union offer to scrap tariffs on cars… ’It’s not good enough,’ Trump said of the offer from Brussels during an Oval Office interview with Bloomberg News [5]. ’Their consumer habits are to buy their cars, not to buy our cars.’

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