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Trump Stumps for 25% Tax Increase, Gets Free-Market Lesson from China


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



Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor's degree in economics and a master's degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Breaking Away: The Case of Secession, Radical Decentralization, and Smaller Polities and Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.