Here’s a letter to a new correspondent.
Mr. H__:
You express support for Trump’s tariffs because, as you write, “they will allow the president to strike deals making trade fairer.”
With respect, you’re mistaken, if for no reason other than this: What protectionist politicians and pundits mean when they talk of “fairness” in trade is, in fact, unfairness to most of their fellow citizens.
Suppose a merchant offers to sell you a bushel of apples for $55. Happy with this offer, you accept. After handing three $20 bills to the merchant, he then gives to you only three-quarters of a bushel and refuses to give you $5 in change. You would rightly describe this merchant’s action as unfair; you were tricked into paying more for less. To put it scientifically, you were screwed.
Protectionist politicians negotiating for “fair trade” aim to screw their fellow citizens in the same manner. Operating under the delusion that exporting is the end-goal of trade and that importing is merely a means to increase exports, when protectionist American politicians negotiate for “fair trade,” the deal they seek is for Americans to export (that is, to pay) more to foreigners and to receive from foreigners (that is, to import) less in exchange. This process and its results are outrageously unfair.
Politicians get away with perpetuating this unfairness because too many people naively take politicians at their word. But don’t be a fool. When a politician obstructs your freedom to spend your money as you wish, and justifies this meddling by telling you that he or she is negotiating for “fair trade,” recognize that that official is arranging for you and your fellow Americans to give to foreigners more in exchange, and for foreigners to give to you and your fellow Americans less in exchange. The benefits of this boondoggle are reaped by a handful of politically powerful American producers, while the larger costs are imposed on the bulk of Americans – including you. And nothing about this arrangement is remotely fair.
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
