By David Harsanyi
Tuesday, June 12, 2018
These days, the label “globalist” is a pejorative meant
to insinuate that a person is more concerned about international corporations
than about his fellow American citizens.
Now, admittedly, I support nearly unlimited trade, no
matter what other nations do. It’s mostly because I love America. “Hey, those
Chinese communists are killing us with high tariffs … maybe we should do the
same thing to our own citizens!” sounds like a counterproductive idea wrapped
in a false choice. Harming hundreds of millions of consumers to try and save a
handful of unproductive jobs, no matter how good it feels, doesn’t put America
first.
Donald Trump, a man who campaigned on protectionist
rhetoric (he was not alone) says he can finagle better trade agreements for the
United States. Honestly, if he’s using the threat of tariffs as a cudgel to
attain those deals, I don’t really care if Justin Trudeau’s feelings are hurt.
I’m fine with the “We’re America, B-tch” Doctrine as long as it’s actually good
for America.
Judging from his rhetoric, though, it seems the president
believes protectionism is preferable to deals that lower barriers all around.
His public position on trade — one of his only enduring political positions —
is that jobs and industries can be saved using tariffs.
Take Trump’s top trade adviser, Peter Navarro, who lays
his two basic concerns in a recent New
York Times article: “First, trade must be not only free but also fair and
reciprocal.”
“Fair trade,” once used predominately by progressives, is
a neologism without meaning. It allows a person to oppose complex agreements
for a litany of reasons. “Fair” is elastic and ambiguous, which is why it’s so
popular with adolescents.
The billions of people in developing nations who work
tedious menial labor jobs probably don’t find it “fair” that we Americans use
the savings we gain from their work to build our unprecedented wealth. Is it
fair that some countries sit atop vast amounts fossil fuels or prime farmlands
while others sit on arid or barren land? Let’s hope trade doesn’t get “fair”
for us any time soon.
When Navarro writes that G7 nations’ trade practices
“contribute to America’s more than $500 billion annual global trade deficit in
goods and services,” he means American citizens, using their free will,
purchased goods and services they prefer from other countries. Sometimes these
products were completely foreign-made, sometimes they are partially
foreign-made — German car companies, for instance, are invested in more than
250 plants in the United States — but Americans always get something in return
for their money. As economist Milton Friedman argued long ago, the real gain
from international trade isn’t what we export but what we import.
More importantly, one reason the United States is running
a trade deficit is that we’re wealthy and larger and can spend more on
foreign-made goods and services than others can spend on U.S.-made goods and
services. For example, China, which many Americans wrongly believe is an
economically comparable power, boasts of $6,894 GDP per capita compared to our
$52,194.
Navarro correctly claims that tariff on cars made in
Germany and elsewhere in the European Union are subject to a 2.5 percent
tariff, while the European Union tariff on American cars is four times as high.
“No wonder,” says Navarro, “Germany sells us three cars for every one we export
to Germany.”
Well, once we consider that Germany has a population of
around 83 million and ours is more than three times that number, per capita, it
makes a lot more sense. But protectionists needs to exaggerate the unfairness
to allow us to play victims. In any event, if our trading partners are behaving
as poorly as Trump claims (and that’s arguable) what would American consumers
gain from paying higher taxes? Would the Germans buy more Fords?
“Second,” writes Navarro, “President Trump reserves the
right to defend those industries critical to our own national security.”
There’s isn’t even a good fake economic argument for
steel tariffs. A vast number of industries and workers rely on steel, while few
work in the steel-making industry. So the administration wants to impose costs
on aluminum and steel imports — far higher than the average tariffs imposed on
the U.S. for the same — as a matter of national security.
Yet steel isn’t technologically sensitive nor uncommon. A
person needs to suspend disbelief and discard history to believe the United
States wouldn’t be able to quickly ramp up steel production if, for some
incredibly strange reason, Canada and Brazil felt the need to undermine our
national interests.
You hate the elites, I get it. But it’s worth noting that
while economists shouldn’t be treated as infallible seersayers, a recent
Reuters survey of 60 found that 80 percent thought tariffs would do harm while
20 percent said they would have little effect. Not one said they would benefit
the economy.
Many voters blame international trade agreements for
trends that are largely a product of automation or increased production. It’s a
story as old as the division of labor. Politicians pretend to show their
empathy for the victims of creative destruction by demanding fairness. But
actually, most often the underlying case for spurring a trade war isn’t even
parity, but rather the promise of preserving unproductive jobs at home. This
ends up distorting markets, killing new jobs, and ignoring reality.
On top of it all, protectionism is cronyism. It’s
top-down control. It’s the state picking winners and losers. It’s a tax on the
vast majority of Americans. Tariffs are all the things conservatives used to
claim to be against.
No comments:
Post a Comment