Conservative free-traders who support Donald Trump don’t talk about trade much anymore. To do so would mean that they have to criticize the president — an economic nationalist with a mercantilist mindset whose ignorance and incoherence on trade knows no bounds — and risk being labeled “Never Trumpers.”
Since Trump’s election and the imposition of his protectionist trade policies, other conservatives, who have always made veiled criticisms of free trade in their writings, have begun to openly denigrate free trade and advocate protectionism. They simplistically view exports as intrinsically good and imports as intrinsically bad, think exports create jobs and imports destroy them, and liken trade to a national game in which one country wins and another loses.
How refreshing it is to see a Progressive make the case for free trade and against protectionism!
Kimberly Clausing is the Thormund A. Miller and Walter Mintz Professor of Economics at Reed College. She is the author of Open: The Progressive Case for Free Trade, Immigration, and Global Capital (Harvard University Press, 2019). In her book she makes the case that
- International trade makes countries richer, raises living standards, benefits consumers, and brings nations together;
- Global capital mobility helps both borrowers and lenders;
- International business improves efficiency and fosters innovation;
- And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship.
She believes that “closing the door to the benefits of an open economy would cause untold damage.”
But that’s not all.
In an opinion piece for The Hill (“5 Reasons Democrats Should Be the Party of Free Trade”), Clausing maintains that Democratic presidential candidates “should agree to move sharply away from Trump’s trade policy legacy.” Democrats “should not follow Trump down the path of protectionism.” For Democrats to continue “the wrongheaded protectionism of President Trump would be foolish.”
In her article, she elaborates five reasons that “tariffs and trade wars harm American workers”:
- First, trade wars are not easy to win; instead, they tend to damage both sides.
- Second, many of the Trump tariffs are levied on intermediate products, harming the many U.S. companies that are reliant on global supply chains to be competitive in world markets.
- Third, tariffs reduce the buying power of workers’ wages.
- Fourth, while Trump claims to be using tariff threats to negotiate better deals with America’s trading partners, existing U.S. trade agreements already favor U.S. interests.
- Fifth, while the United States runs large trade deficits, including bilateral trade deficits with many countries, those deficits have nothing to do with its trade policy or trade agreements.
And just recently, in an article published in Foreign Affairs (“The Progressive Case against Protectionism: How Trade and Immigration Help American Workers”), Clausing criticizes Democrats for their “lukewarm-at-best” support for free trade and hesitation to “repudiate the administration’s trade policies, especially with respect to China.” Free trade “helps workers more than it hurts them” by “reducing prices for consumers and companies.” Trade in general “is not to blame for the woes of the American worker” and “neither are the specifics of individual trade deals.” When politicians “lambast trade” and reach for “protectionist policies,” they harm American workers by adding “insult to injury” and “making their lives even more precarious.” Here are the arguments against protectionism on which she elaborates:
- First and foremost, tariffs act as regressive taxes on consumption.
- Second, tariffs and trade wars wreak havoc in U.S. labor markets by raising costs for American companies.
- Third, trading partners do not sit on their hands when Washington raises tariffs on their products.
- Finally, trade wars harm the global economy and U.S. trading partners, weakening Washington’s network of alliances and jeopardizing the cooperation required to deal with pressing international problems.
None of that, of course, means that Clausing is a closet libertarian. As a Progressive, she favors the federal government’s expanding the Earned Income Tax Credit; increasing the minimum wage; raising spending on infrastructure, education, and research; improving health-care access and affordability; enacting a carbon tax; raising the estate tax rate and reducing exceptions; increasing taxes on the rich; and ending various tax deductions. But of course, conservative free-traders, who generally support the welfare/warfare state, have never been close friends of libertarians either.
Although Clausing makes many good points, something very fundamental is missing from her case for free trade and against protectionism. But she is not alone. The same thing is missing from most conservative cases for free trade and against protectionism: the morality of free trade and the insidious nature of protectionism.
Free trade simply means that every individual and business in every country is free to trade, engage in commerce, or conduct commercial activity in any way and for any reason, with any individual or business in any other country that is willing to reciprocate without any interference from the government. Free trade is a fundamental right. Free trade is good and just, not because it is efficient or beneficial, but because it is free.
All forms and degrees of protectionism require Soviet-style central planning by the U.S. government. Government economists, regulators, and bureaucrats must determine which industries need to be protected; from which countries exports should be restricted; how to erect a particular trade barrier; which items should be subject to tariffs; how much of a tariff to impose; what exemptions should be given; below what price dumping is determined; which goods should be subject to import quotas; what the magic number of the quota should be; what the duration of the tariff, quota, or restrictions should be; and how often the need for some form or degree of protectionism should be reevaluated. As Austrian economist Ludwig von Mises showed us, governments have a calculation problem that cannot be overcome.
Why? Why do Progressives and conservatives alike rarely if ever mention those things?
One, neither group is wholly committed to the freedom philosophy. And two, both groups favor massive government intervention in the economy and society — in certain areas. Take, for example, the drug war. Although Progressives are generally in favor of the legalization of marijuana (with major government regulation and oversight), they, like conservatives, do not support drug freedom when it comes to hard drugs. Both groups think Americans should be locked in cages for possessing any or too much of a substance that the government doesn’t approve of.