Tag: free trade

[Member Post]


I recently read an article by Sen Josh Hawley that advocates a return to Christian Democracy as advocated by Pope Leo XIII in 1901. Here is a the su.mary of Leo’s position per Hawley: The movement’s cornerstone conviction was this: The fin-de-siecle industrial economy had become unsustainable, because it was unjust. It treated working people […]

⚠️ This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet's community of conservatives and be part of the conversation.

Join Ricochet for free.

This week on JobMakers, host Denzil Mohammed talks with Johan Norberg, senior fellow at the Cato Institute and author of Open: The Story of Human Progress. They discuss the many ways in which America is better off because it has been open to the exchange of ideas and skills that created cures, machinery, and technology. However, Norberg cautions that progress is limited as a result of the current obsession with “borders”: sovereign nations, state borders, and rules and regulations that differ even by neighborhood and restrict what we can do. If history is a guide, openness and diversity mean faster progress, innovation, and entrepreneurship. But, he warns, America is already losing ground –  entrepreneurs and inventors are going elsewhere, as you’ll learn in this week’s JobMakers.


[Member Post]


Frederic Bastiat (circa 1850) showed that it is silly to worry about trade deficits by humorously refuting proposals in the French parliament to legislate positive balances of trade. He describes himself as making the following transactions. • I was at Bordeaux. I had a cask of wine which was worth 50 francs; I sent it […]

⚠️ This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet's community of conservatives and be part of the conversation.

Join Ricochet for free.

On this episode of The Federalist Radio Hour, author and film director Chris Fenton joined Culture Editor Emily Jashinsky to discuss the damaged relationship between the Chinese Communist Party and the United States based off his experience distributing major Hollywood films in China. Fenton’s newest book, “Feeding The Dragon,” was released on Tuesday.

Fenton explained the false impression he and so many others in Hollywood and in American companies broadly believed that globalism was an intrinsically good thing. Due to the hope of increased revenue and the American influence pervading Chinese culture, Fenton said so many Americans overlooked the theft and other crime that would be developed.

Is Free Speech Compatible with Free Trade in China?


American populists already blame free trade for costing their country jobs and industrial might. Now they blame it for curtailing freedom of speech. The argument: If the US and Chinese economies weren’t so intertwined, then China couldn’t “export” its authoritarian values by using its huge market power to strong–arm American companies.

Populists correctly note that the NBA’s rebuke of a Houston Rockets official’s pro-Hong Kong democracy tweet is hardly the first instance of Beijing trying to use its financial influence on foreign companies to shape global opinion — especially regarding Hong Kong, Taiwan, and its Uighur reeducation camps. As one China expert told The Washington Post, the Chinese communists don’t tolerate dissent on these issues inside China, “and increasingly they are not tolerating dissent on these issues outside China.”

But these populist critiques of Chimerica also invite the search for a counterfactual: Should Nixon have never gone to China? Should America have tried to somehow quarantine a nuclear–armed nation of one billion people even as it tried to open up and decentralize its economy? Should Washington have simply ignored the reality — and somehow persuaded our allies to do likewise — that China was undertaking significant policy reforms in the direction of liberalization?

Trump’s Trade Travesty


On Friday, August 30, Trump confidently tweeted that anyone who thinks that his aggressive trade war with China could lead to a recession is sadly misinformed. He offered his own two-part explanation for a possible economic downturn. First, unnamed but “badly run and weak companies” are being undone by their own incompetence. Second, their present plight has not been caused by the trade war, but rather by the Federal Reserve’s failure to rapidly cut interest rates.

Chairman Jerome Powell has become a frequent target of the President’s ire. To be sure, the Fed did trim rates by a quarter of a point, from 2.25% to 2.00%, in July 2019. But Trump wanted the Fed to cut rates, already low by historical standards, by a full point. Even more, he wanted the Fed to further jolt the economy through another round of bond repurchases. In an attempt to prod Powell into action, Trump accused Powell of having a “horrendous lack of vision.” When Powell did not blink, Trump doubled down. “As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing,” he tweeted. “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” So much for the traditional independence of the Fed. Trump then lashed out at the private sector by ordering corporations to find alternatives to China. So much for limited presidential powers.

We have three potential culprits for the anticipated economic slowdown: incompetent companies; a dumb Fed Chairman; or Trump’s interminable trade war with China. How would an economic detective assign blame? Let’s take the three in order.

The Wonderful Logic of Nancy Pelosi


Here is a pretty pickle. The Speaker of the House, Nancy Pelosi, has stated that she will fight against any US-UK Free Trade Agreement because of the Irish border. Yet some in the European Union have indicated that they will compel the Irish government to enforce the EU’s border and harden it up to protect the single market from the dangers of American goods in the event of a trans-Atlantic deal.

The great scare is that chicken washed in chlorine or hormone-treated beef might enter the EU single market via Ireland. Like a zombie apocalypse, this would somehow spread as far as the Ukrainian and Turkish borders, infecting all citizens of EU-occupied Europe with American standards. Quelle horreur! The consequences for Europe could be dire; lasagna might actually be made with beef.

For a Better America and World, Free and Open Trade


Trade is good for America. This from the Trump administration’s Office of the US Trade Representative sums up the benefits well: “The United States is the world’s largest economy and the largest exporter and importer of goods and services. Trade is critical to America’s prosperity — fueling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for their families with affordable goods and services.”

With apologies to Han Solo in Star Wars: The Force Awakens, “Crazy thing is, it’s true. The faster growth, the higher living standards — all of it. It’s all true.”

And not just for a wealthy, technologically advanced nation like the United States. In the new NBER working paper “Does Trade Reform Promote Economic Growth? A Review of Recent Evidence,” economist Douglas Irwin finds that research shows a big economic impact from freer and open trade for the countries that need it the most. From the paper (bold by me):

[Member Post]


After protracted smashmouth negotiations, the United States, Canada, and Mexico agreed to replace the North American Free Trade Agreement (“NAFTA”) with the new United States Mexico Canada Agreement (“USMCA”) on November 30, 2018. The new USMCA is largely NAFTA with certain positive elements drawn from the Trans-Pacific Partnership (“TPP”). Unfortunately, certain new protectionist provisions unnecessarily […]

⚠️ This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet's community of conservatives and be part of the conversation.

Join Ricochet for free.

Begun, It Looks Like the US-China Trade War Has


It appears the war of words is over between the US and China. Or, more accurately, the conflict is moving beyond just words. The Wall Street Journal reports: “Beijing said it would retaliate immediately after the Trump administration announced Friday that it will impose tariffs on $50 billion of goods from China, raising the potential for a trade war between the world’s two biggest economies.”

So, escalation. But how does it end? Probably not with China tweaking its state capitalist economic model anytime soon. That would require, if anything, a sustained, multiyear effort where, for instance, Chinese firms benefiting from theft of American intellectual property would face severe sanctions. As my colleague Claude Barfield argues, “Should Beijing remain obdurate against market-opening reform, the US should progressively close off sectors to Chinese investment and operations in this country. Further, in a progressive ratcheting up, Chinese companies should be excluded from US capital markets, including stock exchange listings and the use of American underwriters for capital offerings.”

And this from AEI’s Derek Scissors: “With China effectively closing its market through protection of state-owned enterprises and coercive technology transfer, the US is not obligated by any reasonable standard to open our market fully to Chinese goods, services, capital, or people.”

Trump’s G7 Free Trade Zone Is a Breathtakingly Ambitious Idea. But Has It Been Thought Through?


President Trump’s idea to turn the G7 into a free trade zone strikes one as a bit impulsive and underthought. After all, the Trump trade record this year seems to suggest a different direction, from solar panel and washing machine tariffs back in January to the steel and aluminum tariffs in March to China tariffs perhaps coming up.

Of course, none of that makes a G7 free trade zone necessarily a bad idea. Not at all. In theory, at least, it’s a remarkable one, breathtaking in its ambition. As Financial Times trade reporter Shawn Donnan writes:

Imagine an industrialised free trade area for the ages with no tariffs or other barriers to commerce and only a goal of shared prosperity in the 21st century? From Europe in the Atlantic east to Japan in the Pacific west it would cover a $36tn economic zone and almost half of global output. It would be a remarkable free-market alliance against a rising China and its brand of state-directed capitalism. Talk about a presidential legacy project. It would be huge.

An Expat in Favor of Rattling the Cages of Countries with Large USA Trade Surpluses


Here are some observations from a retired Texan living in Switzerland, a land of free enterprise, and many small … and some large … manufacturers that export over half of what they make. This is a country with really solid primary and secondary schools that graduate literate young citizens; trade schools for the 80% and universities for the 20%; and a land where if you’re here illegally and you are not a true and registered refugee, you will be caught and unceremoniously deported. (Switzerland’s unfortunate decision to be coerced into the Schengen Agreement has led to complications with migrants first passing through EU countries.)

When a country like the United States signs trade deals such that most of its manufacturing is lost on the altar of “Free Trade” (i.e., that which was employing millions of skilled citizens making average incomes, and such that the R&D that heretofore went into improving the products from those now non-existent plants also was replaced), then you have what you have throughout the Midwest and Southeastern United States: many shutdown factories and towns with crumbling infrastructures; and, stagnant numbers of young American technical graduates.

Richard Epstein contrasts two recent actions by the Trump Administration — the imposition of tariffs on steel and aluminum, and the blocking of a foreign company’s attempts to take over an American tech firm — to demonstrate when national security concerns justify restrictions on trade … and when they don’t.

Trump’s National Security Excuse for Trade Protectionism Is Almost as Bad as the Economic One


National security is the justification President Trump will employ if he takes action against aluminum and steel imports. As the president said last week, “I want to keep prices down but I also want to make sure that we have a steel industry and an aluminium industry and we do need that for national defense. If we ever have a conflict we don’t want to be buying steel [from] a country we are fighting.”

Really? Just what sort of military scenarios is the Pentagon feeding the White House? The top two suppliers of steel imports to the US are Canada and Brazil. Russia and China, on the other hand, are fifth and eleventh with 9% and 2% of imports, respectively. Indeed, as trade expert Phil Levy points out, the US currently has defense treaties with five of the 12 countries picked for potentially higher tariffs. Levy adds that the report itself notes that Defense Department steel needs require a measly 3% of US steel production.

This supposed national security reason looks like a paper-thin excuse for trade action. Then again, cooking up an economic justification would be even harder, as Trump’s quote about prices suggests. Although the US metal manufacturing industry produces some $60 billion in value-added output, according to the Cato Institute, domestic manufacturers that use steel generate nearly $1 trillion.

Richard Epstein responds to the Trump Administration’s proposals for revising NAFTA, answers some frequent criticisms of free trade, and explains whether a legal challenge to a NAFTA withdrawal would hold up in court.

Richard Epstein analyzes President Trump’s new plan for Afghanistan, the threat from
North Korea, and how the US should respond to trade tensions with China.

[Member Post]


On August 1, Republican Senator Jeff Flake of Arizona released a book called Conscience of a Conservative: A Rejection of Destructive Politics and a Return to Principle. The title is obviously taken from Barry Goldwater’s 1960 classic. But the subtitle gives you a better idea of what the book is about. The “destructive politics” of […]

⚠️ This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet's community of conservatives and be part of the conversation.

Join Ricochet for free.

Richard Epstein reacts to the Trump Administration’s exhortations to “buy American” and tackles common misperceptions about international trade, NAFTA, trade deficits, and manufacturing.