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To Repeat…

Here’s a letter to Thom Behr, a new Café Hayek reader who reports being “disappointed by its weak arguments”:

Mr. Behr:

Thanks for your e-mail.

Explaining why you “support our tariffs,” you say that you “trust President Trump to negotiate the best trade deal for us with China.”

In theory (if never much in practice) it’s possible for the U.S. government to use tariffs today in order to make trade freer – and, hence, Americans more prosperous – tomorrow. But for this theoretical possibility to exist, those who conduct American trade policy must understand trade. They must understand that imports are benefits and exports are costs.

Sadly however, Mr. Trump not only does not understand trade, his understanding of it is backwards. He is bargaining for us to produce as many goods and services as possible for export to the Chinese and to receive in exchange as few imported goods and services as possible from China.

Although he is unaware of it, Trump is bargaining to impoverish us and to enrich the Chinese.

Our only hope lies in the strange fact that the Beijing government is as thoroughly misguided about trade as is Trump: China’s ‘leaders’ demand that we accept from the Chinese people literal boatloads of valuable goods and services and send to China in exchange as few goods and services as possible. Chinese officials are bargaining to impoverish the Chinese people and to enrich us.

In the warped and wacky world of trade negotiations, we in fact win the more fully our government fails to achieve its objectives, and we lose the more fully our government succeeds. And so for my and other Americans’ sake, I fervently hope that Trump proves to be an absolutely abysmal trade negotiator – the worst in world history.

Fingers crossed for Trump’s complete failure and our consequent victory,
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