Here’s a letter to a new correspondent.
Mr. D__:
Thanks for sending along Rep. Beth Van Duyne (R-TX)’s tweet that “Free trade must ALWAYS mean fair trade.” Endorsing this tweet, you say that “fairness in trade should always be our guide.”
I respectfully disagree.
My disagreement comes from no opposition to fairness; be assured that I endorse fairness just as fervently as do you and Ms. Van Duyne. Instead, my opposition comes from the fact that “fairness” is too inexact and open-ended a concept to serve as a practical guide to the making of public policy – evidence of which is that I can very easily make a credible case that the tariffs that you and Ms. Van Duyne think to be fair are quite unfair.
Is it fair that the U.S. government imposes protective tariffs (that is, punitive taxes) on key inputs used by American manufacturers of machine tools and farm equipment in order to increase the sales of American manufacturers of steel and aluminum? Is it fair for Trump to use part of your income as a bargaining chip to raise the incomes of American farmers? Is it fair for Trump – president of a country in which services are nearly 80 percent of its output – to ignore U.S. exports of services when complaining that we Americans import more goods than we export? Is it fair for Trump and other protectionists, in order to increase public tolerance for higher tariffs, to repeatedly falsely assert that America’s industrial economy has been “hollowed out”?
Is it fair for the government to decrease the purchasing power of your income in order to increase the purchasing power of some other American’s income for no reason other than that other American happens to produce outputs that compete with outputs offered for sale in America by non-Americans?
If you answer ‘no’ to the above questions, then you should intensify your skepticism of Trump’s tariffs.
One enormous advantage of free trade over fair trade is that the concept of free trade, compared to that of fair trade, is far more objective. Either the U.S. government does or doesn’t impose artificial obstructions on your ability to purchase from foreigners goods and services that are perfectly lawful for you to purchase from Americans. If the standard is free trade, public debate and litigation over how well this standard is being met will be much less frequent, intense, and inconclusive than if the standard is fair trade.
Moreover, because we Americans boast that ours is the land of the free, it’s only fair that our government should leave us free to trade.
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
