On all matters, both great and small, the opposite of freedom of contract is always a form of social domination by whichever group holds political power.
Her first mistake is to claim that “economists prefer free trade because it is the best policy for global welfare.” This claim is misleading. While it’s true that economists recognize that the freer is trade the greater is global welfare, the core case for free trade is that it’s a boon to the home country. Pick up any economic textbook – or any other defense of free trade by competent economists from Adam Smith to Jagdish Bhagwati, from David Ricardo to Douglas Irwin, from Frédéric Bastiat to Arvind Panagariya – and you’ll find that the authors emphasize that, contrary to the assertions of protectionists, free trade enriches the home country regardless of other countries’ economic policies.
It is simply untrue that the case for free trade is one in which the economic welfare of the home country is sacrificed in order to increase the welfare of foreigners.
Ms. Freund’s second error is to assume that the large size and wealth of the U.S. market makes it so desirable to foreign producers that they are willing to pay to retain access to this market by absorbing the costs of high U.S. tariffs, an absorption that would show up as falling import prices. The U.S. is indeed an unusually desirable place to sell – a reality that attracted unusually large numbers of merchants, domestic and foreign, offering to sell in the U.S. market. This competition ensures that prices yield no exorbitant profits for the sellers. As such, foreign producers aren’t willing (or able) to pay what Ms. Freund, like Mr. Trump, regards to be an entrance fee to the U.S. market.
Foreign sellers already pay, as it were, a ‘fee’ to sell in the U.S. – that fee being in the form of accepting competitive low prices for their wares. These sellers will not be double-charged.
New data support my point: U.S. import prices rose in July by 0.4% (and the prices of manufactured goods and other nonfuel imports rose by 0.9%).
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
We seem to be headed to a world in which our tariff rates are a multiple of what they were before Trump began his second term. For some countries, notably those in the European Union, tariff rates will be lower than they were before Trump began. That is a victory. But we should be clear about whom it’s a victory for. The main gainers are European consumers, and the secondary gainers are US exporters. The big losers, though, from the high US tariffs, are US consumers and producers who use the tariffed items as inputs, and the secondary losers are foreign exporters.
…..
President Trump has negotiated EU-type deals with the governments of the Philippines, Indonesia, and Vietnam. US consumers will pay a 19 percent tariff rate on goods from the Philippines and from Indonesia, and a 20 percent tariff rate on goods from Vietnam. Consumers in those three countries, meanwhile, will pay a zero percent tariff on imports from the United States. Don’t get me wrong. I’m glad that people in those three countries, almost all of whom are poorer than the average American, will get the benefits of one-way free trade. But I feel bad for Americans who will pay higher taxes. Maybe I really am an American-Firster.
…..
I never believed that President Trump would threaten high tariffs only to get other countries’ tariffs down and then retreat on his own tariffs. I knew too much history about his thinking on trade and tariffs. Some people called me naive for thinking his was simply a protectionist play. I think we know now who was naive.
The producer-price index (PPI) in July rose 0.9% in the month and 3.3% over the last year. Consumer-price data released Tuesday (0.2% monthly and 2.7% for the last 12 months) implied households weren’t experiencing tariff-induced price increases, except in some services such as medical care. The PPI numbers tell us this is partly because companies are paying higher prices but haven’t passed them on to customers—yet.
The producer-price data get worse the closer you look. Goods and services both experienced substantial inflation, of 0.7% and 1.1% month-on-month respectively. Goods and services related to business investment in particular are becoming pricier, with the cost of manufacturing equipment rising 0.4% in one month and related services 4.5%.
…..
Inflation is a broad-based, persistent increase in the general price level. Tariffs in that sense aren’t inflationary unless the Fed accommodates them with over-easy monetary policy. But tariffs do raise prices on tariffed goods, which can mean a one-time surge with some potential downstream effects. What matters for voters, and for their confidence in the economy, is what they see in their own paychecks and cost of living.
Republicans are in the political danger zone if tariffs cause price increases—one-off or persistent—that aren’t offset by bigger wage gains. Republicans will make the same mistake as the Biden Administration if they keep telling voters everything is fabulous but the evidence at the grocery store or Applebee’s tells them something different.
Legality aside, Trump’s revenue-sharing agreement with Nvidia and AMD “further blurs the line between the public and private sectors [and is] part and parcel with the Trump administration’s fondness for central planning directed by the president himself,” says [Clark] Packard. It bears repeating that you don’t beat China by copying China, but by embracing the most productive and innovative economic system known to man: the free market.
And hence Treasury Secretary Scott Bessent’s doth-protest-too-much assertion on Fox Business on Tuesday that Trump’s border taxes will survive the courts because they are raising so much money for the federal government. “The amount of money that’s coming in here — I think the more deals we’ve done, the more money coming in, it gets harder and harder for [the Supreme Court] to rule against us,” Bessent said. He added that tariff income is “well in excess” of $300 billion.
Think about that for a second. At issue in the tariff case is whether the president is usurping Congress’s power to tax. And the treasury secretary is pointing out that the tax is so large that the courts can’t possibly find that the president has exceeded his power. That has it backward.
Counting the number of jobs is very, very hard. And the BLS was very, very good at it. For the worst miss to be less than 1 percent and the median miss to be 0.29 percent is an incredible testament to the agency’s professionalism and competence, built over years of experience. Tearing that down is a whole lot easier than was building it up.
The Republican Party once sold itself as the last line of defense against an overreaching federal government. Today, it champions state control over private enterprise, embraces protectionist tariffs that raise consumer prices, and presides over record‑shattering spending that will burden future generations with mountains of debt. What began as a movement to curb Washington’s reach has morphed into a governing philosophy that wields government power to direct markets, pick winners, and paper over self‑inflicted economic wounds. In forsaking the creed of limited government, the GOP has not merely drifted from its roots, it has become the very Leviathan it once vowed to oppose.
This report — the first of many of its kind, I hope — shows that it’s still possible to respectfully and professionally confront entrenched dogma. It takes experts and people in power who are willing to be challenged or erroneously smeared as deniers. That’s no small thing. I also hope the result is a climate policy crafted from facts, whatever they might be, rather than fear.
For that to happen, others must insist that open debate guides the response. And more importantly, we must all tolerate the debate.
Mamdani as mayor might not be much worse than his principal rivals: Current Mayor Eric Adams has a mediocre record and an aroma of corruption; the recycled Andrew M. Cuomo resigned under various clouds during his fourth term as governor. As mayor, none of the three would probably be as admired as the current police commissioner, Jessica S. Tisch. None of the three would be apt to challenge the teachers union that controls the nation’s largest public school system, which is producing mostly depressing results.
Besides, if Mamdani would be marginally worse than those other two products of the city’s political culture, that might be constructive. He might become America’s François Mitterrand.
As France’s president, Mitterrand set back socialism for several generations. He was elected in 1981 promising a “rupture with capitalism” and a “break with the logic of profitability.” He implemented sweeping nationalizations, radically increased welfare benefits, imposed higher taxes on the investing classes, instituted a shorter workweek without reduced compensation, etc. In 1982, after the franc had been thrice devalued, he pivoted to “socialist rigor,” a.k.a. austerity: “You can’t continue to crush with taxes and fees all those people who create wealth in France.”
Socialism in a circumscribed but conspicuous jurisdiction can occasionally be a valuable reminder of toxic political temptations. Hence Mamdani’s usefulness.
… is from page 153 of the 1983 Transaction Publishers edition of Redvers Opie’s 1934 translation of Joseph Schumpeter’s 1912 book, The Theory of Economic Development:
Entrepreneurial profit … is the expression of the value of what the entrepreneur contributes to production in exactly the same sense that wages are the value expression of what the worker “produces.” It is not a profit of exploitation any more than are wages.
DBx: Yes. And failure to grasp this point has led many people, not least Karl Marx, to mistakenly conclude that profit is an extraction of value by persons who do not produce that value from persons who do produce it. This mistaken conclusion has fueled a great deal of tyranny.
Successful entrepreneurs in markets, including those pictured here, earn their riches by creatively arranging for resources, including labor, to be used in ways that are more productive than anyone had thought of earlier. Far from extracting their profits from workers, successful entrepreneurs make their workers more productive, and competition obliges these entrepreneurs to share the great bulk of these gains with workers and consumers.
First, Ms. Graf slays a straw man when she correctly argues that tariffs will have little to no effect on the price level: Higher prices for protected outputs will largely be offset by lower prices for unprotected outputs. Contrary to Ms. Graf’s supposition, therefore, the core economic case against protective U.S. tariffs isn’t that these levies will fuel inflation but, rather, that they’ll pull resources away from industries for which Americans have a comparative advantage and into industries for which Americans have a comparative disadvantage. Although the result over time will be economic productivity (and, hence, living standards) lower than otherwise, it’s unlikely that this effect will be able to be isolated in measures of aggregate inflation.
Second, it’s untrue that Trump’s first-term tariffs “helped pull some manufacturing back. From 2017 to early 2020, the economy added roughly 500,000 manufacturing jobs, outpacing the pre-tariff growth rate.” Ms. Graf mistakes manufacturing employment for manufacturing output. Manufacturing output was slightly lower in January 2020 (the month before covid hysteria took hold) than it was in January 2017. Tellingly, manufacturing output did rise somewhat from early 2017 through the summer of 2018, when Trump’s tariffs began earnestly kicking in. But from September 2018 through January 2020, this output fell by 3.1 percent. Manufacturing employment rose only because the productivity of manufacturing workers fell: The hourly productivity of manufacturing workers fell in each quarter starting in the third quarter of 2018 through the fourth quarter of 2019. These data are consistent with economists’ argument that protective tariffs reduce productivity.
Third, it’s also untrue that manufacturing capacity expanded during Trump’s first term. In fact, it shrunk, being 2 percent lower in January 2020 than in January 2017.
It’s easy to make a case for protectionism by getting the facts wrong, but it’s almost impossible to do so when getting the facts right.
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
In your follow-up email to this post you charge me with failing to “admit that Pres. Trump has millions times more business sense” than do I and other economists. You recommend that I “shut up and let an expert show how it’s done.”
I confess to having no business experience, but I know enough to know that no sane business person would run his or her company in the way that Trump wants to run what he erroneously takes to be USA, Inc.
Trump mistakenly believes that USA, Inc., is cheated whenever any of the other economic entities with which it deals, such as Switzerland, Inc., buys less from USA, Inc., than USA, Inc., buys from that entity. Trump wants USA, Inc., to sell to (export to) each and every one of the other individual countries with which it trades as much as USA, Inc., buys from (imports from) that country.
So let’s put Trump’s belief to the test by supposing that he isn’t president of the United States but, instead, president and CEO of General Motors. Trump would then insist on charging GM’s materials-acquisition division a penalty for the steel it purchases from US Steel, with this penalty to remain in place until US Steel agrees to buy as many automobiles from GM as GM buys steel from US Steel. If US Steel (and each of any other steel suppliers) refuses to satisfy this condition, Trump would then suffer GM to get by using less steel.
CEO Trump would make the same demands on each and every one of GM’s many other suppliers: GM would restrict its purchases of rubber from rubber producers until and unless each individual rubber producer spends on GM outputs at least as much as GM spends on rubber from that individual supplier. Ditto for each company that supplies GM with aluminum, chemicals, wood, machine tools, insurance, electricity to run its factories, and on and on.
Indeed, CEO Trump, upon observing, to his horror, that GM runs trade deficits with each of its workers, would refuse to employ anyone who doesn’t annually buy from GM as much as GM annually buys from that worker.
After implementing his new policy, CEO Trump would boast about his genius demands to GM’s board and shareholders – who would immediately fire him for his unprecedented incompetence in running that corporation into the dirt.
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
Anyone trying to make sense of President Trump’s tariffs is missing the point. The conga line of trade negotiators will keep dancing because Mr. Trump will continue to use tariffs to exert dominance, signal threats and make deals. There won’t be a new end state. Tariff numbers will keep fluctuating, prices for goods and investments will be unreliable, and agreements won’t last. But the damage to America’s economy and strategic interests will persist.
The president has cited various goals for his disorderly deal-making. He wants to cut bilateral trade deficits, open foreign markets, protect favored U.S. industries and restore manufacturing. He also wants to raise revenue and in some instances simply punish others for a perceived offense. His administration leaps from one rationalization to another to justify the boss’s most recent whim. But Mr. Trump won’t be pinned down. He believes uncertainty adds to his power and wants the freedom to bully others depending on what has his attention.
…..
As a former reality TV star, the president enjoys signing papers and waving them before cameras. He likes announcing concessions and deals. He revels in the appearance of winning and moving on to the next episode. The rest of his government scrambles to discover the terms of the deals, sorting through the exceptions and side bargains—before the merry-go-round spins again. Enforcement will depend on Mr. Trump’s attention span and his latest fancy.
…..
By contrast, Mr. Trump relies on coercive power. He views economics as a zero-sum contest for a fixed pie of resources and wealth to be divided up through his deals. Ironically, the interdependence of America’s allies enables Mr. Trump to menace them more than possible foes. He is pummeling friends Washington will need for military, intelligence and technological cooperation. In contrast, he has been cautious with China, which made a plan to hit back effectively, especially through controlling exports of vital minerals.
Mr. Trump’s trade policies and uncertainty will impose costs over time. Prices will increase. Washington will misallocate resources to less-competitive sectors. Productivity will slide. Other countries will be less willing to rely on American policies and companies. The costs might be offset for a time by other aspects of the U.S. economy, such as investments in artificial intelligence, data centers and energy. But America will be dissipating economic power, resilience and competitiveness. Brexit offers a rough analogy. The U.K.’s withdrawal from the European Union didn’t plunge the British economy into a nose dive, but over the years costs related to the shift have ground down the economy.
This isn’t leadership—it’s a con. Trump’s tariffs inflate costs for everyone, making consumers and businesses pay more while killing small firms’ ability to import. His random, ever-changing tariff rates—picking winners and losers with no logic—wreck supply chains and choke the market. It’s government interference on overdrive, not a strategy. The fix? Scrap tariffs, cut regulations, and let markets work. Trump’s boasts about Big Tech are a desperate distraction from the truth: he’s claiming credit for wins he didn’t earn while his policies demolish Main Street. Economic freedom means letting businesses thrive, not letting Trump take a bow for other people’s work.
Markets are not indifferent to where and how goods and services are produced. They are highly — ruthlessly — partial to producing them where and how it is most profitable to do so.
The profit-loss system consolidates decentralized information from around the world into price signals. Those signals tell people where and how it makes the most sense to produce something. They often tell people things that are counterintuitive, such as that it is actually more efficient to have a piston cross national borders six times during its production. The signals also tell people things they would have no possible way of knowing otherwise, because prices are formed through the process of exchange. Prices “are continually being discovered and formed by entrepreneurs testing ideas about future consumer wants and resource constraints,” as Marian Tupy and Peter Boettke recently wrote. It’s a marvelous bottom-up system of packaging and transmitting information.
Affirming the justice of that system is not a neutral statement. It is an affirmation of property rights and the wisdom of individuals and businesses to make decisions for themselves. The prosperity it creates is good for lifting people from poverty and increasing their access to goods that make their lives better. I’m not indifferent to more goods at affordable prices, and neither are American workers who want to make the most of their paychecks.
Protectionists would replace that system for determining where and how to produce with one that says the government knows better. That is inescapable for protectionists. Michael is correct that statesmen cannot be indifferent. They are likely to ignore the solid information that comes from prices and be partial to their particular view on what is good for the country, which is of course influenced by what helps them get votes and campaign donations. That top-down method of decision-making is less likely to deliver prosperity.
And, perhaps fortunately, tariffs are no longer an abstract question. The U.S. currently has an avowedly protectionist administration, led by a protectionist president and staffed and advised by the country’s leading protectionists. And U.S. tariff policy doesn’t remotely resemble the statesmanlike ideal that Michael invokes. The president is running roughshod over the Constitution to impose tariffs on adversaries and allies alike, announcing and modifying them by social media post, making mutually contradictory claims about their purpose, all while bragging about the foreign investment that the supposedly evil trade deficit makes possible. I look forward to being told that true protectionism has never been tried.
Beyond the troubling legal questions, the deal with Nvidia and AMD reeks of more crony capitalism. Just as it has used and threatened tariffs to seemingly obtain concessions from foreign countries on trade, this new deal suggests that the Trump administration will leverage the executive branch’s authority to regulate and restrict imports, exports, and foreign investment to bring private companies to the negotiating table to serve the president’s political prerogatives.
Just two months ago, the administration secured an agreement whereby Japan’s Nippon Steel granted the federal government a “golden share” in the company in exchange for President Trump’s approval of Nippon’s acquisition of US Steel. (The acquisition had previously been blocked by President Biden on exceedingly weak “national security” grounds.) That deal gives Donald Trump, in his capacity as president, a veto over many of the business decisions that the merged steel firm might make—from changing the company’s name or relocating its headquarters to reducing planned investments and changing the strategy for sourcing inputs.
In May, President Trump threatened to put a 25 percent tariff on iPhones made outside the US in an attempt to get Apple to make its smartphones in America. To avoid this tariff hike, Tim Cook has announced a $600 billion investment in the US over the next four years. Former US trade negotiator Stephen Olson has pointed out that, “What we are seeing is in effect the monetization of US trade policy in which US companies must pay the US government for permission to export. If that’s the case, we’ve entered into a new and dangerous world.”
In July, Trump imposed 39 percent tariffs on Switzerland—more than double the 15 percent rate to which its European Union neighbors are subjected—marking a sharp departure from the American-Swiss trading relationship. The tariffs went into effect last week on August 7. The average tariff rate that the U.S. subjected Swiss imports to was 2.21 percent in 2022 (the most recent year for which data are available), according to the World Bank. Switzerland’s average tariff rate on American goods was even lower: a mere 0.52 percent. In January 2024, Switzerland abolished all industrial tariffs, resulting in 99.3 percent of American goods entering the country tariff-free, according to Switzerland’s State Secretariat for Economic Affairs.
Despite Switzerland’s nearly completely laissez faire trading relationship with the U.S., Trump complained of a $41 billion deficit with Switzerland during an August 5 interview on CNBC’s Squawk Box. (According to the Office of the U.S. Trade Representative, the American-Swiss goods deficit in 2024 was not quite that high: $38.3 billion.) However, this figure excludes trade of services between the two countries, which accounted for a trade surplus of $29.7 billion in favor of America. The total trade deficit, then, was approximately $8.6 billion, or 21 percent of Trump’s inflated claim.
In fact, there’s strong evidence that the BLS has only gotten more accurate over time, not less. Ernie Tedeschi of The Yale Budget Lab and former chief economist for the White House Council of Economic Advisors released this analysis the trends of revisions:
The revolutionary generation was the most cosmopolitan of any in American history. The revolutionary leaders never intended to make a national revolution in any modern sense. They were patriots, to be sure, but they were not obsessed, as were later generations, with the unique character of America or with separating America from the course of Western civilization. As yet there was no sense that loyalty to one’s state or country was incompatible with cosmopolitanism…. The truth was, said Thomas Paine in Common Sense, that Americans are the most cosmopolitan people in the world…. Americans prided themselves on their hospitality and their treatment of strangers.
You accuse me of being an “extremist free trader thinking all Pres. Trump is trying to do is make the economy stronger.” But, you say, “the President’s goal in his tariffs is grander by encompassing a total restoration of America’s dominance on the world stage.”
Non-Americans surely are completely befuddled when they encounter assertions from MAGA-types such as yourself that the U.S. is a lame, inconsequential, washed-up, and battered and abused weakling that can be restored to its former greatness only by the braying and bullying tactics of Donald J. Trump.
With respect, you write nonsense.
But even if I’m wrong and America really is the dupe and punching bag of other countries, your man Trump – if only because he’s profoundly ignorant of trade – isn’t the savior you take him to be. Trump’s belief that U.S. goods trade deficits with individual countries, such as Switzerland, are a problem that signals mistreatment of, and harm to, the U.S. is a belief so ill-informed, so whackadoodle, so downright ludicrous, that to imagine that a person who clings to this belief is to be trusted to invigorate the patient is monumentally self-destructive.
Suppose you contract pneumonia and your neighbor, a real-estate agent, shows up to give you medical advice. He tells you, with boundless confidence, that your disease is caused by little gremlins who invaded your skull and that you can be cured only by having your neighbor bang you incessantly in the head with a sledge hammer. If you can imagine how you’d react to such a diagnosis and proposed remedy, you might begin to understand how those of us with at least an inkling of knowledge of economics react to Trump’s diagnosis of U.S. trade and to his quack remedies.
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
Front-and-center in this narrative is trade with China, which in 2000 was granted Permanent Normal Trade Relations status with the United States and in 2001 joined the World Trade Organization. David H. Autor, David Dorn and Gordon H. Hanson later found that, from 1999 through 2011, in locales especially exposed to Chinese imports the so-called “China Shock” destroyed up to 2.4 million jobs.
The shock is blamed for decreased marriageability among displaced workers, degraded social relationships, and more widespread feelings of loneliness. Case and Deaton suggest that exposure to imports ultimately served to “undermine social life and the structure of society, destroying the American Dream for many, and bringing on increased mortality.”
If this account is valid, the case for free trade would be severely undermined. However, there are other reasons to believe that the connection between free trade and fatalities is weak.
For starters, manufacturing jobs as a share of total nonfarm employment began falling steadily in 1954, with no acceleration in 1999. Before and after China ramped up exports to the United States, manufacturing employment as a share of total employment fell by 2 percent annually.
Further, as trade economist Robert Feenstra and his co-authors discovered, “the negative effects of import competition on U.S. employment are largely balanced out” by the “job-creating export expansion” that has taken place at home. Of the areas most affected by trade, many experienced growth in nonfarm employment above the national average. They may have experienced a decline in manufacturing jobs, but growth in other industries offset the decline.
Most tellingly, while “deaths of despair” are highly concerning and on the rise nationwide, the geographic areas that suffered the most significant increase in these tragedies are not those that have experienced the most manufacturing job losses.
And here you thought the lesson of the Smoot-Hawley tariff era was that a trade war can be destructive. Think again, folks, because President Trump’s lawyers say the courts must uphold the legality of his tariffs or there could be “a 1929-style result.”
That’s the out-of-this-world argument that Solicitor General John Sauer and Assistant Attorney General Brett Shumate made this week in a letter to the Court of Appeals for the Federal Circuit. The judges must give the President unilateral power to impose tariffs on any country at any time, or the end is nigh. Better buy gold and put your cash in a mattress.
Mr. Trump justified his “reciprocal” tariffs by invoking the 1977 International Emergency Economic Powers Act to declare emergencies over fentanyl and the trade deficit. A lower court blocked the tariffs in May (V.O.S. Selections v. Trump) as an illegal exercise of presidential power, and Mr. Trump is appealing.
The Federal Circuit put a stay on the lower- court ruling so it could hear the President’s appeal. Oral arguments before the full Federal Circuit late last month didn’t go well for the government, which may explain the Justice Department letter, which echoes a tirade by Mr. Trump against the judges.
“If a Radical Left Court ruled against us at this late date, in an attempt to bring down or disturb the largest amount of money, wealth creation and influence the U.S.A. has ever seen, it would be impossible to ever recover, or pay back, these massive sums of money and honor,” Mr. Trump wrote Friday on Truth Social. “It would be 1929 all over again, a GREAT DEPRESSION!”
Wow. Ending a tax increase means depression. Who knew? Mr. Trump also seems to think any judge who rules against him is a radical leftist. But the 11 judges who heard the appeal include Republican and Democratic appointees. Messrs. Sauer and Shumate parrot Mr. Trump’s doomsday prophesies in their letter.
…..
The letter to the Federal Circuit judges illustrates the Trump style: try to intimidate by exaggerating the impact of a decision he doesn’t like and suggest he’ll blame the judges. We trust the judges won’t fall for it. If they do rule against the President and he appeals, we hope the Supreme Court quickly takes the case.
To place huge new tariffs on imports from China, President Donald Trump claimed that those transactions are “an unusual and extraordinary threat” to the United States.
It’s a threat that the White House now says it can put off addressing for another 90 days.
On Monday, Trump again postponed the enforcement of his threatened 30 percent tariffs on imports from China, which were set to resume on Tuesday after being previously postponed in May. In a new executive order, Trump said the United States “continues to have discussions” with China “to address the lack of trade reciprocity in our economic relationship and our resulting national and economic security concerns.”
Elsewhere in the same executive order, Trump reiterated the claim that trade with China poses “an unusual and extraordinary threat to the national security” of the country.
The idea that mutually beneficial trade between people or businesses in different countries is some sort of national security threat is nonsense, of course. But, even if you accept Trump’s premise that trade with China is an urgent threat requiring extraordinary executive powers, then how can it be acceptable to wait three more months before applying the president’s chosen remedy?
What Trump would like is a BLS that is biased in his favor. The latest proof of that is his nominee to be the next commissioner, E. J. Antoni.
Antoni is the chief economist at the Heritage Foundation. He has been a relentless booster of Trump’s policies on social media. And he has demonstrated time and again that he does not understand economic statistics.
Whether that is due to willful misinterpretation or ignorance on Antoni’s part is open for debate. But the pattern is undeniable.
President Trump did himself no favors by firing the Bureau of Labor Statistics head because he didn’t like last month’s jobs report. He also did no favors for his nominated BLS replacement, Heritage Foundation chief economist E.J. Antoni, who will now have to overcome public skepticism to show the data can be trusted.
…..
Mr. Antoni’s commentary at Heritage has been highly partisan, but the BLS job demands nonpartisan professionalism. Last week he cited BLS survey data—yes, despite previously criticizing it as unreliable—to argue that Mr. Trump’s immigration policies have caused a surge of employment of native-born Americans as “artificially cheap labor is removed” from the economy.
The data he cited is questionable because it also shows that the native-born population over age 16 grew by 4.5 million since last December. That’s unlikely in half a year. It increased by about 1.5 million annually on average last decade and flatlined in 2023 and 2024. See the nearby chart. Perhaps immigrants told surveyors that they were born in the U.S. because they were afraid of being deported.
Few people trust China’s economic data because they know the government serves the interests of the ruling Communist Party. Mr. Antoni will have to take off his MAGA hat if he wants to ensure that the public and markets can trust BLS data.
On all matters, both great and small, the opposite of freedom of contract is always a form of social domination by whichever group holds political power.
Entrepreneurial profit … is the expression of the value of what the entrepreneur contributes to production in exactly the same sense that wages are the value expression of what the worker “produces.” It is not a profit of exploitation any more than are wages.
The revolutionary generation was the most cosmopolitan of any in American history. The revolutionary leaders never intended to make a national revolution in any modern sense. They were patriots, to be sure, but they were not obsessed, as were later generations, with the unique character of America or with separating America from the course of Western civilization. As yet there was no sense that loyalty to one’s state or country was incompatible with cosmopolitanism…. The truth was, said Thomas Paine in Common Sense, that Americans are the most cosmopolitan people in the world…. Americans prided themselves on their hospitality and their treatment of strangers.
