Here’s a letter to a relatively new correspondent.
Mr. H__:
Two weeks ago you wrote to justify tariffs as a means of “defying the excessively rapid pace of change of today’s globalization”; in your view, tariffs “are a major device for engendering better predictability in the economy.” Today you write to applaud Pres. Trump’s recent tariff moves as “successful threats to get other countries to treat us better.”
Ignore the fact that whenever Trump threatens to impose tariffs, what he uses as bargaining chips are the wealth and opportunity of ordinary Americans. Ignore also the fact most of what Trump disapproves of other counties doing is, in reality, either of no harm to Americans or of positive benefit. For example, the U.S.’s so-called “trade deficit” with Canada is an utterly meaningless factoid, while the U.S.’s trade deficit with the rest of the world – reflecting, as it does, net inflows of global capital to our shores – is a huge benefit to us.
Instead recognize that Trump’s whipsaw-like trade actions combine with his attempts to justify these actions – attempts that are saved from being completely inconsistent only by their unintelligibility – create greater uncertainty for American entrepreneurs, investors, consumers, and workers. I confess that I cannot comprehend how you can, in one note, lament what you have somehow determined to be excessive uncertainty in the modern global economy, and in another note praise Trump’s cyclone of erratic trade-policy moves.
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
