President Donald Trump has referred to the trade deficit as a loss, as if we lose money by buying imports. But we don’t lose money when we trade to obtain goods produced by foreigners. This is like saying we lose when we have a trade deficit with the local grocery store. Every week I buy goods from the grocer, and he doesn’t buy any goods from me. But I gain because I get food to eat.
Free international trade raises our standard of living because it enables us to obtain less expensive goods and goods that cannot be produced in the U.S. Tariffs are taxes that raise the cost of bringing goods into the U.S. and thus make goods more expensive. They also protect inefficient domestic producers by restricting competition from foreigners. They, therefore, make it possible for these producers to remain in business when they would otherwise be driven out of business.
We don’t want inefficient producers to remain in business, even when they are domestic producers competing against foreigners. We want the most efficient and effective producers to prevail in the market. This is how we get the best products at the lowest price and how the standard of living is raised. Even domestic producers driven out of business gain once they find another area in the economy where their skills are more highly demanded.
Domestic producers don’t have a right to anyone’s business. If you want to buy goods from foreigners rather than domestic producers, you have the right to do so. It’s a violation of your rights for the government to attempt to stop you or make it harder through tariffs.
We have no duty to purchase domestically produced products just so domestic producers can continue in their current line of work. This is a collectivist idea that must be rejected (for humanity’s sake no less). If domestic producers want your business, they need to compete more effectively.
Tariffs not only harm consumers, but they also harm domestic producers who use foreign made inputs in their businesses. More than half of all imports are purchased by domestic producers. By imposing tariffs, we push their costs and prices up and reduce employment in these businesses.
This helps one understand that tariffs don’t save jobs. They save less productive jobs at less efficient businesses at the expense of more productive jobs at more efficient businesses. Free international trade and tariffs change the pattern of employment, not the overall level of employment.
Do we need tariffs for national security? No. The only proper purpose of the government is to protect individual rights, including from aggression by foreigners. If the government deems it necessary to produce a product domestically for national security purposes, it can just purchase the product domestically.
Trump economic advisor Peter Navarro believes we need tariffs to have fair trade. But free trade is fair trade. Free trade makes it possible for people to buy goods they think are best for pursuing their own happiness. It’s unfair and immoral to violate people’s rights, through tariffs, by making it harder or impossible for them to purchase goods they prefer.
Trump says we need tariffs as a negotiation tool to achieve lower tariffs in other countries, and this will help lead to free trade. It would be beneficial to eliminate tariffs around the world. But you don’t establish free trade by violating the freedom to trade.
The age-old principle “two wrongs don’t make a right” also applies here. Other governments using tariffs to violate the freedom of their citizens to trade doesn’t justify our government doing the same. The best policy to follow is one of unilateral free trade: eliminate all our tariffs and push other countries to do the same. This, ultimately, is the only way to achieve free trade.Some Trump supporters might claim that I suffer from TDS, so my arguments aren’t valid. This is an “argument” that is used to evade the arguments I’m making. If you can’t refute someone’s arguments, attack the person making the arguments instead to try and prevent people from seeing that you can’t refute his arguments. It’s an implicit admission that you have no argument to back up your claims.
Every argument for tariffs is invalid. They are immoral and economically harmful. Free international trade is just one aspect of the freedom of the individual to further his own life and well-being that a laissez-faire capitalist society protects. Protecting the freedom and rights of the individual is what makes capitalism the only moral type of society. It also leads to the greatest rate of economic progress and highest standard of living that are possible.
Brian P. Simpson is a professor at National University in San Diego and author of “Markets Don’t Fail!” and “A Declaration and Constitution for a Free Society.”
