Here’s a letter to The American Conservative.
Editor:
To justify his latest round of tariffs – that is, his latest barrage of punitive taxes on Americans’ purchases of imports – President Trump resorts to allegations of “unfair trade practices.” And to justify the president’s allegations, Jon Schweppe resorts to unfair intellectual practices (“Relax, Panicans: Trump’s Tariffs Are Just Getting Started,” June 20). Any policy can be ‘justified’ if its apologists are unconstrained by reality.
Consider, for example, Mr. Schweppe’s charge that American industry has been “hollowed out” in large part by producers fleeing to countries with weak environmental standards. He’s seemingly unaware that U.S. industrial capacity is today at an all-time high, while U.S. industrial output is a mere one percent below the all-time high that it hit in September 2018 (only months, by the way, after the imposition of Trump’s first tariffs).
Where’s the “hollowing out” that Mr. Schweppe and other protectionists never tire of bleating about?
As for Mr. Schweppe’s claim that the U.S. is losing investments to other countries because of other countries’ more-lax regulatory policies, in nine of the ten years from 2016 through 2025, the country that received the most inflow of foreign-direct-investment capital is the United States. (The U.S. ranked second in the pandemic year of 2020, receiving slightly less FDI than China.) Over this entire ten-year period, the U.S. ranked first as a destination for FDI, receiving a total of $2.69 trillion, which is 18 percent of all FDI, and 84 percent more than the amount received by second-place China.
Extending our view to the past 25 years (2000-2024), the value of the stock of FDI in the U.S. increased during this time by $12.8 trillion, which is by far the largest increase in the world. China boasts the second-largest increase of $3.46 trillion – a mere 27 percent of the increase in the stock of FDI in the U.S.*
It’s easy to make any case, no matter how absurd, by misrepresenting reality and hoping that your audience won’t notice – that is, by resorting to unfair intellectual practices. It’s a bit more difficult, yet vastly more productive – and honorable – to actually consult and report the data even when they fail to tell the tale that you wish to be told.
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* Data gathered, with Claude’s help, from various issues of UNCTAD’s World Investment Report.
