Since 2011 (and possibly before), Donad Trump, a “candidate” for the GOP nomination, has been been advocating for harsh trade measures against China, even once advocating a 25% tariff on Chinese goods. He claims it is necessary because the Chinese have been manipulating the Chinese currency to gain a trade advantage (the US, of course, would never do such a thing.) Reuters reports today:
[Trump] saved his wildest attacks for foreign policy, frequently accusing China of stealing jobs and portraying himself as a tough negotiator who would beat Beijing at its own game.
But leave it to the Chinese (I guess) to explain to Trump what every serious economist since Adam Smith has known: namely, that trade is a win-win two-way street for a variety of reasons. If Trump wants to beat China at its own game, he would advocate for total unilateral free trade, since such a move would immediately make real wages in the United States go up (the cost of living would fall) while making the cost of building a business go down as well. In any case, it is impossible for some state agent to determine what jobs should be “here” and what jobs should be “there” by substituting personal whims and fancies for the market process, which allocates goods according to the freely demonstrated preferences of millions of buyers and sellers.
Moreover, remember that Trump’s tax increase and trade war also comes with more big government, more bureaucracy, more fines, prisons, government prosecutions, and all the other draconian baggage of big government that accompanies trade restrictions, including embargoes.
