China is ruled by thugs – thugs whose imprisonment of Jimmy Lai is inexcusable. A slice:
Closing arguments in the year-long trial of Jimmy Lai were postponed again Friday until he can be fitted with a heart monitor. The 77-year-old publisher has been jailed for nearly five years, most of it in solitary confinement and wretched heat, and Reporters Without Borders says his health is declining in Stanley prison.
Though Hong Kong’s authorities have spent more than a year trying to document the supposedly nefarious activities he is accused of against the Hong Kong and Chinese governments, all they have proven is that he was an energetic newspaperman.
Hong Kong was once known for its rule of law and free press. But China has imposed a national-security law on the territory that it has used to shut down criticism and toss critics in jail. Its harsh treatment of Mr. Lai has turned the local businessman into the world’s most famous imprisoned champion of freedom.
A President declaring a “national emergency” over a trade imbalance or overcapacity in foreign markets, leading to his imposing taxes on Americans without Congressional deliberation or scrutiny, and possibly gifting him a massive pool of funds he could use for patronage, is exactly the sort of thing the Constitution was designed to prevent. It violates the separation of powers, eludes democratic accountability, and fits the pattern of emergency overreach our Founders repeatedly warned against throughout the constitutional debates. Even the biggest fan of an energetic executive, Alexander Hamilton, wanted to make sure that most of these powers remained firmly under Congressional control.
Indeed, Hamilton, supposedly the father figure of American protectionism, made many of the same arguments that free market economists make today about the abuse of tariffs as a revenue source. In the aforementioned Federalist 35, Hamilton says explicitly that “the consumer is the payer,” recognizing that the tax burden falls not on the foreign exporter, but on the American consumer. Indeed, this is why he recognizes that tariffs cannot be the only source of revenue for the federal government, as their burden would fall inequitably on the poor.
David Henderson wisely recommends reading a recent interview with the economist Anne Krueger. A slice:
Industrial Espionage Goes Both Ways
KRUEGER: Let me answer half a question you didn’t ask: the Chinese have on occasion tried very hard, I think, to oblige [the United States]. And I think we have missed the signal completely. I think their system is not a good system, and I think they themselves are not quite capable of understanding why it is not a good system, but this idea that they’re always stealing from us, that we never steal from them is silly. I mean, the idea that there’s no industrial espionage in this country! When I was in Silicon Valley, nobody would send a piece of equipment to any of the electronics fairs, even the big one in Las Vegas, without making sure there was some employee 24 hours a day watching the machinery to make sure nobody could reverse-engineer it. Now we’re so mad at the Chinese that they tried to do the same thing. Meanwhile, we’ve had more than one CIA agent arrested [in China] and pretty much caught dead to rights.
Why “Market Failures” Are Not Enough of an Argument for Government Intervention
KRUEGER: Some of these arguments about the market assume that if there are market failures, then whatever the government will do will be better. Maybe the market failures are huge, but that does not persuade me that government failures will not automatically be as huge. That’s the part that’s wrong. I still think that when you’re talking about lots of economic activities, you want to just look at incentives. If there’s something wrong with the market, get the incentives right. Giving bureaucrats the incentive to regulate is not the incentive that will work best in most cases.
You may be (but since you’re reading this, probably aren’t) surprised to learn that there’s nothing “reciprocal” about these “reciprocal tariffs.” In fact, the Trump administration’s new tariff regime,
- Only once matches new US tariffs to other countries’ tariffs (and rarely even gets close to such a match);
- In the vast majority of cases—and for all major US import sources and free trade agreement (FTA) partners—sets US tariffs at rates much higher than those foreign governments apply to American goods; and
- Whether intentionally or not, actually tends to impose higher tariffs on countries with lower tariffs on US exports.
The Wall Street Journal’s reporters summoned every ounce of their capacity for professional understatement when they called the Trump administration’s demand to recoup 15 percent of the profits derived from the sale of sophisticated electronics to the Chinese “unusual.”
That’s one way to describe the federal government shaking down private companies for a vig in exchange for unlocking the formerly restricted sale of sensitive components and resources with military applications to a great-power rival. A less charitable observer might call it a racket.
The maneuver is an extraordinary intervention into the private economy in ways that expand the remit of the president. It’s also an abdication of the commander in chief’s conventional obligation to preserve U.S. national security. Not that the American targets of Trump’s squeeze seemed to mind. Both Nvidia and Advanced Micro Devices were more than happy to kick a taste up to the big boss if it restored their access to the lucrative Chinese market. They’re not alone.
