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Donald Trump hit a nerve on tariffs, American manufacturing, and competition from China. A lot of people find the arguments for free trade unpersuasive and feel they’ve been on the receiving end of a bi-partisan policy that that imposes rules on costs on Americans that lets the rest of the world (literally) profit at our expense. I don’t quite buy that narrative but — as I’d wager some of you are thinking — of course you wouldn’t, Meyer. That doesn’t mean it’s totally wrong, though, and of course I want of my fellow countrymen to have every opportunity to find remunerative, useful employment.
My problem with Trump on this matter isn’t so much his calling attention to problems, but that his solutions are bunk. More specifically, I think the kinds of tariffs he’s suggesting are going to hurt people by raising prices, will spark retaliation against our own manufacturing, and will suffer from all the pitfalls that happen when one person thinks he’s smarter than the combined wisdom of hundreds of millions. Trump may have an economics degree, but his reading seems to have stopped before Adam Smith.
Even if Trump’s ideas worked as promised, they still strike me as misinformed. First, most of the manufacturing jobs in China aren’t particularly attractive and don’t make economic sense when you factor for Americans’ productivity and education. As Kevin Williamson and others have said, if you want to build cars, airplanes, firearms, or other high-end manufactured goods, Americans are the people to go to; if you want to make flip-flops, cheap electronics, or things that should be labeled as disposables, you’ll go broke hiring people as expensive as us. Second, the 1950s were an aberration: there were far fewer industrialized nations 60 years ago, and those that existed were still digging out of the Second World War. Third — whether it’s a good thing or a bad thing — we’re living through an emergence of a service economy much like the emergence of an industrial economy that started 200 years ago.
So if tariffs aren’t the answer, what is? My sense is that — while American manufacturing will and should be more expensive than its competitors’ (because it’s higher-quality) — there’s a lot we’ve done to artificially jack that price up. For starters, there’s our absurdly expensive and mandatory healthcare system and the political uncertainty that’s likely added a lot of hidden cost to our jobs. Who wants to hire expensive Americans when you don’t know how much extra their labor will cost?
That’s likely just one part of the puzzle. What else can we do to make sure we aren’t needlessly hurting our own workforce? Over-burdensome regulation? Right-to-Work laws? As much as possible, be specific. And yes, immigration is a totally game answer.