We can lament the behavior of foreign governments that use tariffs and subsidies because we recognize that these interventions are counter-productive and distortive. But it’s crucial to understand that the main victims of such interventions are not Americans but, instead, consumers, taxpayers, and unprivileged producers in those countries. Such interventions weaken those foreign economies relative to our own. Similarly, it is well-established that the Trump tariffs are mostly shouldered by Americans, many of them manufacturers and exporters, and this new series of tariffs won’t get him any closer than the objective he wants.
For this reason (and for others) McCarthy is wrong to assume that the appropriate response of our government is to mimic those destructive policies. If imitation is the highest form of praise, the last thing we should want is for the U.S. government to model its policies on those dreamed up by the tyrants and mandarins in Beijing.
Here’s Richard Ebeling on John Stuart Mill on slavery and the American civil war.
Robby Soave details one of the latest eruptions of lunacy in the elite American academy.
Such demands are the worst of “managed trade,” which is not anything approaching free trade. It revives an approach that members of the World Trade Organization rightly agreed to forego in the 1994 Uruguay Round Agreement. By requiring China to meet specific dollar targets, the agreement favors U.S. products, arguably violating the core principal of non-discrimination that has undergirded the global trading system since the 1940s. The agreement may be vulnerable to challenge by other WTO members.
Such a massive increase in Chinese purchases of U.S. goods and services cannot be achieved through the normal channels of supply and demand. Instead, it will require even more intervention by the Chinese government in the operations of Chinese domestic producers, both private and government-owned. This will push China in exactly the opposite direction of the more market-oriented economy the Trump administration claims it wants China to adopt.
