Trump's Trade Trifecta
Well, it’s now obvious that Canada has not dodged a bullet. One of President-elect Trump’s most sincerely held views is that free trade is suspect. He buys into virtually every mercantilist myth, even claiming in a recent tweet, “China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade.”
This goes way beyond mercantilism into incoherence. No trade can be a little one-sided, let alone “totally one-sided.” The reason is that when you trade, you give something up and get something in return. Trade is necessarily two-sided. Even more flabbergastingly, Trump is not complaining that Americans don’t get enough from China in return. He’s complaining that it gets too much! This massive amount of wealth that he thinks China is taking from America is, mysteriously, in the form of goods that we Americans buy from China at low prices. What nerve those Chinese people and firms have, selling us things at low prices when, Trump seems to be saying, we should prefer to buy them at high prices.
This is from my most-recent blog post at the Fraser Institute blog. The post is titled “Trump’s trade trifecta will likely target China, Canada and beyond.”
In it, I highlight the threat from the trifecta of Navarro, Ross, and Lighthizer.