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Richard Epstein explains the shortcomings of President Trump’s trade policy, explores the best and worst-cases scenarios, and lays out the right — and wrong — ways to think about trade deficits.
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I get that you are all arguing that it makes sense that the EU and whoever else may want to respond with their own tarriffs, but what does not seem to get addressed is that we already seem to have non-balanced tarriffs. Perhaps Trump and those of us who are willing to give him the benefit of the doubt here think that maybe ‘they are already doing something stupid’ so maybe we are just returning in kind now in an effort to try to get a fairer deal.
Everything Epstein says is dead on. I wish more folks would take it in. The New Zealand example is perfect. New Zealand did not have the leverage to negotiate other countries’ barriers down, they just liberated their own economy and boomed. However, they also marketized the rest of their economy so it could adjust to the new incentives. We have not deregulated enough, nor have we, as did New Zealand, introduced schools choice. Free trade forces a country to end stupid policies because those stupid policies cause pain when a country can’t compete. We have suffered from the flood of imports because we have not undone stupid policies. The administrative state is the problem and must be dismantled. Protectionism builds the administrative state more than any other set of policies.