Here’s a letter to a first-time correspondent.
Mr. K__:
Thanks for your e-mail.
You allege that I “underestimate the value of President Trump’s tariff threats for getting pro-American concessions from foreigners.”
With respect, you misdiagnose the nature of – and underestimate the dangers of – such trade “policy.”
Forget that neither Canada nor Mexico really conceded much in exchange for Trump agreeing to postpone the tariffs. Forget that much of what Trump seeks from other governments as concessions are moves that would harm Americans. (For example, if the Canadian government takes steps to reduce Canada’s so-called “trade surplus” with the U.S., we’ll suffer as a result of having less capital than otherwise on our shores.) Forget that the on-again, off-again, Trump-will-put-them-on-again-at-his-whim use of tariffs creates uncertainty for investors here and abroad – uncertainty that, by discouraging investment, diminishes our industrial capacity. And forget that such bullying tactics weaken other government’s confidence in the trustworthiness of the U.S. government, thus lowering the probability of productive mutual cooperation on military and diplomatic fronts.
Instead focus on the fact that every time Trump threatens tariffs he uses as bargaining chips the wealth and opportunities of you and me and other ordinary Americans. How is this ethical?
Suppose you and I are neighbors who frequent a local restaurant. One day you take a dislike to one of the waiters. To get the waiter fired, you announce to the restaurant manager that, unless she fires the waiter, you’ll point a loaded gun at me and other restaurant patrons in order to prevent us from dining at the restaurant. The waiter gets fired. You “win.”
Do you deserve applause? Are you some sort of genius negotiator who should be commended for cleverly holding innocent people hostage to achieve an end that you have somehow divined should be achieved? No. You’re a thug, pure and simple.
Trump’s trade “policy” is thuggery, pure and simple. And it’s thuggery not only or even mainly against foreigners; it’s thuggery chiefly against Americans.
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
