It came as no surprise to hear President Donald Trump declare again that he favors government management of international business dealings. “I believe strongly in free trade, but it also has to be fair trade,” Trump said in his speech last Tuesday to a joint session of Congress.
It was no more of a surprise to hear representatives and senators and gallery guests applauding a sentiment that works against prosperity in the U.S. and around the world. Americans have been responding to such pandering for generations, setting aside their natural distrust of bureaucracy to favor authoritarian power over this vital interest.
Nothing could be more unfair than a tariff, which taxes foreign producers’ goods so they can’t compete for local consumers’ patronage. Equally unfair are quotas, temporary embargoes, “voluntary” export restraints, anti-“dumping” price controls, licensing requirements, labor and environmental standards, and subsidies for domestic losers.
Never mind that the government pretends to impose trade barriers for its citizens; it is done for only a few citizens with vulnerable jobs and investments. Local consumers pay higher prices for trade barriers, and the protection rarely works for long. Even the beneficiaries would do better without it.
Unrestricted trade is one of the few free lunches in economics, no less beneficial for being held in such general contempt.
This is the policy that has fed, clothed, housed, and equipped Americans for more than two centuries, ever since they began to enjoy the benefit of the Constitution’s prohibition on trade restrictions among the states.