Is Trump's China Bashing Vindicated If It Leads to Lower Chinese Tariffs? No.

Were Trump a master trade negotiator, logic dictates that he would skip any trade talks and immediately work with Congress to zero out all tariffs on foreign goods.

The Washington, D.C. area PBS affiliate has lately been airing a documentary titled “D.C. In the 90s.” An hour long, it’s a look back to what Washington was like during, well, the 1990s. That the city was rundown is a classic understatement. It’s also a digression.

The documentary is mentioned because when the last decade of the Millennium began, 9:30 Club was apparently THE music club in Washington, D.C. Bands like Nirvana played there ahead of achieving global stardom. Then Black Cat came along. By 9:30 Club co-owner Seth Hurwitz’s own admission, Black Cat was a better music club in most ways. Soon enough its owner Dante Ferrando was booking bands that had historically been booked by Hurwitz.

Competition from Black Cat plainly threatened 9:30 Club’s existence, but as the documentary went on to inform viewers, it didn’t put it out of business. It just improved it. 9:30 among other things moved to a better location that was more band-friendly, and was soon enough back on top. Hurwitz acknowledged in “D.C. In the 90s” that competition is what forced the 9:30 Club to fix what it was doing wrong. And the rest is history. To this day the musical venue is a major player in D.C. Competition happily drove its positive evolution.

What Trump is doing is wholly superfluous, and worse, risky.

Which brings us to a question that’s regularly asked about President Trump on television and radio. People ask if there’s a silver lining to Trump’s China and Europe bashing. In particular, they ask if Trump will have been vindicated if his tariff threats result in various nations reducing existing tariffs levied on goods produced in the United States. The answer to the question is no. What Trump is doing is wholly superfluous, and worse, risky.

It’s risky because wars of any kind rarely go according to plan. Because they don’t, Trump’s jawboning risks something much worse as witless politicians in the U.S. and elsewhere start introducing all manner of tax barriers to exchange. Lest we forget, politicians are expert at making the 99.9% pay for the protection of the very few, but very well connected special interests. Washington is a favor factory, as are the capitals of other countries. Once politicians start handing out the false favors, it’s hard to take them back. And we all suffer.

What’s important for the health of any individual or business is that each be relentlessly exposed to the competition that wards off stagnation.

Perhaps not discussed enough is that the protected businesses suffer the most. Think 9:30 Club once again. Absent competition, it would have had much less incentive to improve. 9:30’s competition was local, but for someone to focus on the location of a competitor is for that someone to make a distinction without revealing any kind of difference. What’s important for the health of any individual or business is that each be relentlessly exposed to the competition that wards off stagnation. Along these lines, Rafael Nadal’s rise forced Roger Federer to get better, as did the Beatles’ Rubber Soul elicit Pet Sounds from the Beach Boys. Needless to say, “international” competition greatly improved Federer. So did it improve the Beach Boys. And that’s not the only benefit of open trade.

As this column regularly states, open trade improves the individual for the individual having the whole world competing to serve his needs. Open markets mean we get regular raises even if our pay in dollars remains the same.

Imagine how poor and bland the U.S. would be if Europe and Asia lacked any productive inhabitants.

Best of all, when we can divide up work with as many people as possible, we’re able to specialize. The latter is the source of the productivity advances that lead to ever higher individual pay. If this is doubted, imagine how poor and bland the U.S. would be if Europe and Asia lacked any productive inhabitants. The U.S. economy would be “dominant” in global terms, but much less dynamic with exponentially lower living standards. All of this hopefully answers the question posed about Trump, and the alleged good that would result from his global trade threats.

Some who are prone to excusing his at times economically-illiterate rhetoric do so based on the notion that Trump's words could force high-tariff countries to bring down their barriers to foreign goods. Ok, but if that’s Trump’s game plan, then every rational voter should be seething right now. They should be given the basic truth that his trade sermonizing amounts to the 45th president telling the world’s leaders that his administration will soon begin harming the American people and American businesses until they cease harming their people and their businesses. Trump fancies himself a master negotiator, and while the latter is perhaps true when it comes to property, he’s exposing himself as hopelessly naïve on the subject of trade.

Were Trump a master trade negotiator, logic dictates that he would skip any trade talks and immediately work with Congress to zero out all tariffs on foreign goods.

He is because he’s blind to the obvious truth that maximum exposure to market realities is what improves businesses, improves individual productivity, and improves the living standards of every American. Were Trump a master trade negotiator, logic dictates that he would skip any trade talks and immediately work with Congress to zero out all tariffs on foreign goods. That’s the ultimate deal for U.S. workers and businesses regardless of what other countries do, yet Trump, clearly talking about something he doesn’t understand, seriously believes harming every American is the path to prying open foreign markets. What it comes down to is that Trump’s trade bluster amounts to a rather illiterate non sequitur. Openness to foreign goods is what always and everywhere makes us better off, and in all ways. Why is the President delaying reducing the tariff burden that saps American productivity and quality of life?

It's time for Trump to shelve the rhetoric and simply call for an erasure of all U.S. tariffs on foreign goods. What’s brilliant if the rest of the world mimics us is no less brilliant if none of the world does. Openness to foreign competition and plenty improves us, period, and for the same reason that domestic competition does. Were he more aware of what he was actually negotiating, Trump would agree. He needn’t worry what others do so long as he’s freeing Americans to prosper.

Reprinted from Forbes

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