Please watch the video clip juxtaposing Milton Friedman and President Trump on the issue of trade.
I can’t resist, however, throwing my 2 cents worth into the debate. On the whole: “free” trade good, “fair” trade bad. Friedman is right in bringing to light the skulduggery done in the name of “fair”. You may as well find room for “fair” in the seven deadly sins. It belongs there. “Fair” becomes the weapon for one group to gain power to unjustly extract benefits from another. For you policy nerds, it’s called “rent seeking”. Look it up.
Does Trump understand this? My guess: No. Or maybe he does but doesn’t care. Either way, the rhetorical “fair” fits into a grand misunderstanding that roils around in his head. He sees the “trade deficit” as a checking account. It ain’t! This trade balance (or imbalance) is only one part of a larger thing called the “balance of payments”. The reality boils down to the simple concept of exchange. For instance, the Chinese get dollars for what they export to us. Those pieces of paper roll around but always come back to us. We get stuff, they get paper. Simple.
Where Trump may be onto something is the uneven effects of “free” trade on the country. It benefits the coasts and cosmopolitan financial centers. Taking the brunt will be manufacturing areas. Politically speaking, the blue dots get to roll around in filthy lucre as the vast red stretches in middle America see businesses shudder and wallow in an opioid epidemic.
And let’s not forget the danger of “free” trade with Red China. I have a problem with doing business with empire-building totalitarian kleptocracies. This ain’t normal business. For the totalitarian goon, the normal interplay of cost/benefit plays second fiddle to the ultimate end of domination at home AND abroad. Our national security is at stake. We should act like it.
“Free” trade has a social cost; “fair” trade is a moral monstrosity. When in doubt about PRC trade, let the safety and security of our people be the decider. With the free and open democracies, we should incline to “free”.
RogerG