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Commentary

Trump’s Trade Policies Protect Producers Instead of Consumers



President Trump’s protectionist “Buy American” moves are turning out to be a big part of what he thinks will make America great again.

Unfortunately, protectionism is a conspiracy between favored domestic producers and the government to harm domestic consumers (including the many exporters harmed by more costly inputs), and patriotism cannot justify helping American producers harming American consumers.

We would do better to learn from Leonard Read, founder of the Foundation for Economic Education, in “Having My Way” (1974):

“The admonition to ‘Buy American’ has two diametrically opposed meanings ... shun goods produced in foreign countries ... [or] shun principles and practices alien to the American dream of limited government and personal freedom.

“Buy my product because it is made here ... is sheer chauvinism. Suppose I were to urge your acceptance of my ideas, rather than those of Marx or Machiavelli, merely because of our differing nationalities. The absurdity of such an appeal is obvious: neither goods nor ideas are properly judged in this fashion; geographical origin has nothing to do with the matter.”

Read advocates “buying” the principles that really made America great in advancing the interests of Americans, rather than endorsing actions that violate the American principle of freedom to choose your own productive associations, provided only that you don’t violate the common, inalienable rights of others. And he offers an excellent test of whether “patriotic protectionism” is defensible: Change “Buy USA” protectionist policies to “Buy Chinese” or “Buy Mexican” protectionism, and ask Americans if patriotism justifies it. We would overwhelmingly reject that idea as little more than special pleading by and for political favorites at others’ expense:

“Enough of this mischievous notion ... ‘buy’ the American ideal of freedom.

“Consider the Constitution of the United States ... In what respect is this distinctively American? ... ‘No state shall without the consent of the Congress, lay any imposts on imports and exports.’

“In a nutshell, no tariffs, quotas, embargoes between the several states...the world has never known a free trade area as large as the U.S.A. when measured in value of goods and services produced and exchanged. Never perfectly free, but the nearest approximation to freedom!”

In other words, the freedom to associate for productive purposes however and with whomever one chooses, because people were protected from government violations of that principle, was the essence of the American miracle. And at its heart, as Thomas Jefferson wrote, was “the first principle of association, the guarantee to everyone of the free exercise of his industry and the fruits acquired by it.”

“Competition, combined with free exchange ... is the password to economic opportunity and well-being—an American idea well worth buying.

“Name one who does not favor competition among those from whom he buys.

“Name one who would not welcome an order ... from another country.”

Leonard Read realized that protectionism is based on Swiss cheese logic and put into practice as theft impoverishing everyone except those protected from the need to attract buyers from better offers. It is neither liberty nor justice for all.

“What then is meant by ‘Buy American’ in its proper sense? Let willing exchange prevail among all people, locally and worldwide. Let each buyer or seller be guided by his own scale of values. Sell the American way and buy the American way — not as presently practiced, but as once prevailed and ought to be reinstituted. Keep ours the land of opportunity for everyone.”


Gary M. Galles is a Research Fellow at the Independent Institute, Professor of Economics at Pepperdine University, and Adjunct Scholar at the Ludwig von Mises Institute.






  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org