Here’s a letter to City Journal.
Editor:
Jordan McGillis argues that allowing the Chinese to build and sell cars in America poses severe national-security risks to the U.S. (“Keep Chinese Cars Off American Roads,” May 13). Reasonable people can debate the merits of Mr. McGillis’s case. But he unwittingly casts discredit on his argument by revealing ignorance of fundamental economic realities. Specifically, Mr. McGillis writes that “Chinese companies like BYD and Geely Auto setting up shop stateside arguably fits with the president’s goal of balancing trade.”
No it doesn’t. If the Chinese build automobile factories in the U.S., the result will be U.S. trade deficits larger than otherwise (or at least not smaller) and, thus, no alleged improvement in what Trump supposes is a trade imbalance. (Put aside here the fact that worries about the alleged dangers to America of so-called “unbalanced trade” are ludicrous.)
By revealing such a foundational misunderstanding of trade, Mr. McGillis ensures that even reasonable arguments that he might offer about the subject will be dismissed, by informed people, as too likely to be mistaken.
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
