The negotiations typically take years, or decades, while the broader economy bears all the costs of protectionism. Is the game worth the prize?
“There is a great deal of ruin in a nation,” Adam Smith famously remarked. Donald Trump is currently putting that theory to the test. Pile on enough debt, create enough uncertainty around monetary policy, and throw up enough barriers to trade and at some point you will drive even the strongest economy into the ditch.
— Donald J. Trump March 2, 2018Let’s make the best case for what Trump is doing. Let’s look past his obsession with the bilateral trade balance, or his evident belief that it is some sort of national profit-and-loss statement — as if the trade deficit, the amount by which China’s exports to the United States exceed American exports to China, were anything but another name for the capital surplus, the amount that China lends to the United States in excess of what America lends to China.
The issues with China, of course, go well beyond tariffs. Nobody doubts that China puts up innumerable less formal barriers to imports and otherwise distorts trade and investment flows, notably by requiring foreign companies operating in the country to transfer technology to their Chinese competitors, among more overt forms of intellectual property theft.
Alas, that’s not how these things usually play out. Ask our own government, which retaliated to Trump’s tariffs on Canadian steel and aluminum with tariffs of its own. A year later, both sides’ tariffs are still in place. Indeed, the same tendency to inertia holds in reverse: promising to lower your tariffs if the other side lowers theirs, the principle underlying all international trade negotiations — the “cold” form of trade war.
The only way, they argue, to overcome the “public choice dilemma” — that the benefits of protection are concentrated, while the costs are diffuse, meaning the beneficiaries have every incentive to lobby for continued protection while those who pay for it typically do not even know they are paying — is to tie the government to an external constraint, in the form of a trade treaty.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Andrew Coyne: Prosecution of Mark Norman is over, but questions the affair raised remainNorman’s guilt or innocence is only one aspect of this case; perhaps not even the most important one
Read more »
Andrew Coyne: Mark Norman got justice, but Canadians still need answers‘At the very least, it sounds like this thing was massively bungled’
Read more »
Andrew Coyne: With a chance to reach centrist voters, Scheer’s policy speeches are smart politicsTo reach the voters he needs to reach, it is the later speeches — on the environment (read: climate change), immigration, and federalism — that will be crucial
Read more »
Andrew Scheer’s ‘vision’ is Classic Conservative, with an anti-China twistThe Tory Leader’s speech in Montreal is noteworthy in that it’s a call for a wary engagement with China in the future, which means doing less with Beijing, not more
Read more »
Choral maestro Andrew Balfour pursues his Indigenous identity through musicWhile classical music has been especially slow to embrace Indigenous artists, the versatile Cree composer is drawing on his identity to nudge the scene out of its stodgy Eurocentric traditions. But he can’t do it alone
Read more »
British historian Andrew Roberts brings Churchill talks to VancouverFans of Sir Winston Churchill will have a unique opportunity to hear about his life.
Read more »
Andrew Scheer tries to project statesmanship with first in a series of major policy speechesScheer spoke at a lunchtime event organized by a non-profit foreign policy group in Montreal. In a twist, the event was sponsored by SNC-Lavalin
Read more »
Andrew Benintendi's homer in 12th lifts Boston Red Sox over Baltimore Orioles - TSN.caAndrew Benintendi homered in the 12th inning, and the Boston Red Sox received a masterful pitching performance from Chris Sale and a game-saving catch from Jackie Bradley Jr. in a 2-1 victory over the Baltimore Orioles on Wednesday night.
Read more »