[M]ore than a million American jobs depend directly on exports to Chinese consumers. About 0.5 percent of the U.S. work force would lose their jobs if the U.S. lost access to its third-largest exporting market.
In other words: If Trump passes the tariffs he’s been promising, the GOP’s newfound identity as the party of the working class would be just a brief stopover on the way to becoming the party of the unemployed class. The economy would eventually find work for most who lost their jobs in this decoupling shock, but those jobs would on average be less productive and pay less, since they would be in sectors where America has less of a comparative advantages.
Still more opportunities would be lost in the future, since protectionism reduces competition and innovation.
DBx: Someone might acknowledge that all that Johan says here is correct, but nevertheless insist that further government-engineered decoupling from China is justified on grounds of national security. A priori that insistence can’t be dismissed as misguided. But surely it’s not too much to ask proponents of such decoupling at least to acknowledge not only that such a move necessarily has economic downsides, but that these downsides are substantial. How do the decouplers know that whatever we Americans gain on the national-security front will be greater than what we lose on the economic front?
Serious question: What’s the most credible, serious effort undertaken to estimate these benefits and these costs and then to compare the latter to the former?
And please do not say that economic benefits cannot or ought not be weighed against national-security benefits; do not say that national security is too important and foundational to be compromised for something as tawdry as ‘mere’ economic benefits. If you’re tempted to say this, then – before you do – let me ask you: Would we Americans be made better off if we became a militarized society, with the great majority of our GDP devoted to military and other national-security efforts? Should we spend all of our labor and other resources in pursuit of no end other than national security?
