Here’s a note to a commenter at my Facebook page.
Mr. Schlomach:
You write that “China is at war with the U.S. and has been carrying it out by non-traditional means” – one of which, you allege, is the dumping of its exports in America.
While China and the U.S. are not actually at war with each other, I’ll grant that the thugs in charge in Beijing pose a potential military threat to U.S. interests. But I’ll not grant the proposition that an effective means of harming a rival nation is to engage in so-called “dumping.” If the Chinese really are selling goods to Americans at prices below the costs the Chinese incur to supply these goods, they are impoverishing themselves as they enrich us. An undercover U.S. operative in Beijing could do no better than to arrange for the Chinese to engage in such behavior.
If you disbelieve me – if you think that a path to riches is paved by offering to sell goods to others at prices below the cost of supplying these goods – I urge you to go to Amazon, order all sorts of home appliances, household goods, clothing (my pants size is 32/32), consumer electronics, and books (I really like history) and offer to sell these goods to me at prices below the ones you paid. I’ll likely take you up on many of your offers and thank you sincerely for transferring some of your wealth to me.
Of course, you have enough sense to know not to engage in such self-destructive behavior. Whether or not Beijing’s brutes have the same good sense is a different question. (Governments have a long track record of imposing policies that economically damage their own citizens.) But what’s not in question is that if such “dumping” is indeed practiced, it hurts the Chinese and helps Americans.
A further point is worth making. Pres. Trump often boasts that his tariffs will be “eaten” by foreign suppliers. Never mind that his boast is factually incorrect. If it were correct, the tariffs would cause Chinese exporters to lower the prices they charge Americans – implying that Mr. Trump believes either that Chinese “dumping” is a myth or that it poses no dangers to Americans.
In a later note I’ll address your concern about strategic industries. I ignore that concern here because the current structure of the president’s widespread tariffs suggests that these measures are not designed to address any such concern.
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
