Here’s a letter to the New York Post.
Editor:
Perhaps a good case can be made that, to strengthen America’s security, the U.S. government ought to restrict our trade with the Chinese. But such a case should be economically coherent. Elaine Dezenski’s case is not (“Trump is fighting a historic clash of civilizations against China — here’s how he could win it,” October 10).
She writes: “China limits its critical exports to weaken our defenses, it also floods the world with overproduced cars and heavily subsidized steel, shutting out market-oriented producers.”
In a single sentence, Ms. Dezenski asserts that China hurts us both by exporting too little to us and by exporting too much to us. Which is it?
If, as Ms. Dezenski implies with her comment about cars and steel, domestic industries suffer and dangerously shrink when our producers compete freely with low-priced imports, Beijing does us a favor by withholding “critical exports.” This move by Beijing raises the profitability of expanding U.S. production of “critical” goods such as rare-earth materials.
But if, as Ms. Dezenski also claims, we would benefit from increased access to “critical” goods from China, surely we benefit also from increased access to the likes of cars and steel from China.
It makes no sense to argue that Beijing hurts us by decreasing Chinese exports of “critical” goods, and also by increasing Chinese exports of less-critical goods – increased exports, take note, that enable more of our resources to be devoted to the production of “critical” goods and services.
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
