Mr. Howard Lutnick
Secretary, U.S. Department of Commerce
Washington, DC
Mr. Lutnick:
Yesterday you tweeted this:
Our trade deal with Vietnam is a massive win for America’s businesses, manufacturers, and farmers!
For the FIRST TIME EVER, Vietnam will open its market to the United States. They will pay 20% to sell their products here, and 40% on transshipping – meaning if another country sells their content through products exported by Vietnam to us – they’ll get hit with a 40% tariff.
For starters, you’re patently mistaken to assert that Vietnam is opening its market to U.S. exporters “for the FIRST TIME EVER.” As reported by the Office of the U.S. Trade Representative, “U.S. goods exports to Vietnam in 2024 were $13.1 billion, up 32.9 percent ($3.2 billion) from 2023.” And this figure doesn’t include U.S. exports of services to Vietnam, that are also in the billions.
Even worse is your false assumption that U.S. tariffs on American imports of goods from Vietnam will be paid exclusively by the Vietnamese. It’s true that, because trade is mutually advantageous, Vietnamese exporters will suffer as a result of the tariffs; they’ll sell fewer goods to Americans. But the very fact that Americans will get fewer goods from Vietnam means that we Americans also will suffer; we’ll pay higher prices because these new U.S. tariffs – which are double what they were prior to Trump’s latest trade war – reduce the abundance of goods available to Americans.
Yet your most egregious error is to presume that we Americans gain when our government charges foreigners for what you suppose is the privilege of offering to sell their goods to us. Foreign sellers already pay “to sell their products here” simply by incurring the costs of producing and shipping their goods to our shores. Every cent that we spend on their goods is a cent spent voluntarily – a cent that reveals that we Americans gain from the opportunity to buy those imported goods.
Suppose I employed thugs to guard the entrances to all restaurants and other retail establishments that you visit, and ordered those brutes to demand from these merchants a 20 percent fee for the ‘privilege’ of offering to serve you. Economically, would you be made better off? Ethically, would my mafia-like action be acceptable? Of course not. And this reality would not in the least be altered by a puerile tweet.
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
