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Tag Archives: Trade Barriers

Free to Trade with China (and Anyone Else): A Response to Michael Brendan Dougherty

What about China? That’s the surprising objection I’ve received to my “Departing the Shining City,” which ran on The Bulwark over Labor Day weekend. My essay looks back on Michael Anton’s “The Flight 93 Election” and disputes his objections to immigration (broadly, not just “illegal immigration”) and trade (again broadly, not just “unfair trade”), as well as his rejection of Goldwater–Reagan conservatism. I expected to get some criticisms for the essay, but I’m...

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Anecdotes vs. Data in the Trade War

Anecdotes are not necessarily useful to understand the social and economic world. An anecdote based on a sample of one can be worse than useless. A related point: we don’t expect a plumber to be able to criticize the mechanics of fluids; and we don’t expect a businessman to successfully challenge the economics of international trade. Jean-Baptiste Say, author of the 1803 Treatise on Political Economy, was an exception, and he wrote a whole treatise to prove it. Brian...

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War by any other means

Pierre Lemieux has an excellent post discussing President Trump’s decision to call off the military strike on Iran.  Like Pierre, I welcome this decision.  However, I’d like to point out that there is a sense in which we are already at war with Iran. Trump’s decision to place increasingly tight economic sanctions on Iran, and also to punish any third country that trades with Iran, is effectively an act of economic warfare.  It is intended to severely damage the...

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The Poverty of Protectionism and the Impact of Tariffs

The arguments for liberty are richer and belong to a deeper and more credible tradition than the authoritarians’ arguments. Nowhere perhaps is this more obvious than in the area of international trade. We can speak of the poverty of protectionism—even if, no doubt, many of the doctrine’s proponents have much of what hell is paved with. I cannot resist the temptation to quote a consistent authoritarian and defender of slavery before the Civil War, George Fitzhugh, who...

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Navarro’s “Fair, Reciprocal, and Balanced Trade”

Peter Navarro is director of the Office of Trade and Manufacturing Policy, a White House agency created by President Trump, and one of the latter’s main trade advisers. He is a mystery: despite an economics Ph.D. in economics from Harvard University, he seems ignorant of economics. What he now says contradicts virtually everything he wrote in his 1984 book, The Policy Game: How Special Interests and Ideologues Are Stealing America, where he defended free markets and...

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The China shock ended long ago

A much cited study by Autor, Dorn and Hanson found that the surge in imports from China reduced employment in numerous local US labor markets during the period from 1990 to 2007.  Of course that was a period where the overall labor market did pretty well, with unemployment trending lower.  But what about the period since 2007? A new study suggests that the China shock was considerably smaller than previously estimated, and basically came to an end in 2008.  Here’s The...

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Who is most vulnerable in a trade war?

In a recent Bloomberg piece, Tyler Cowen argues that “China is probably in the more vulnerable position” in the current trade war with the US. While the overall argument is plausible, there are a few questionable points that are worth discussing: To see why the full picture is more complicated, let’s say the U.S. slaps tariffs on the industrial inputs (whether materials or labor) it is buying from China. It is easy to see the immediate chain of higher costs for the...

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Backlash Immortal

Here’s a two-step exercise. Step 1: Read this passage. Based on research to date, there would seem to be little reason to worry about a protectionist backlash against globalization in response to rising inequality. If the “average” economist thinks that technology’s role has been four times as important as that of trade, surely policy discussion is focusing on how to even out the gains from technology, not on how to erect new trade barriers? Unfortunately, this is not...

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Trillion $ Trump Tweets

Last night, President Trump tweeted that the US was going to move toward higher tariffs on Chinese goods. Global stock markets immediately sold off, losing over a trillion dollars in market value. Today, there has been a partial recovery, but stocks are still significantly lower. How should we think about these losses? One view is that the drop doesn’t matter, as stocks will bounce back after the two sides reach a trade deal.  I do believe that it is highly likely...

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Gérard Araud on the decline of neoliberalism

Alex Tabarrok quotes from an interview of French Ambassador Gérard Araud: I don’t think that anything irreparable is happening in the U.S. I don’t know what would have happened in France if Marine Le Pen had been elected, because our institutions are much weaker. Let’s look at the dogma of the previous period. For instance, free trade. It’s over. Trump is doing it in his own way. Brutal, a bit primitive, but in a sense he’s right. What he’s doing with China should...

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