Trump’s trade outlook proves he’s a protectionist
that is both true and not obvious. British journalist Matt Ridley calls Ricardo’s insight “a thoroughly counterintuitive idea” that “takes Adam Smith’s division of labor one step further.” It explains why free trade benefits every country.
Seven years after Ricardo’s book appeared, Thomas Babington Macaulay wrote, “Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.” It certainly is with the Trump administration, which bristles with chest-thumping anti-cosmopolitans who are too flinty to be bamboozled by foreigners like Ricardo and others who deny that trade is a zerosum game.
After the president trumpeted that the Dow surpassing the 22,000 mark was evidence of America’s resurgent greatness, The Wall Street Journal rather impertinently noted this: Boeing, whose shares have gained 50 percent this year and which accounted for 563 of the more than 2,000 points the Dow had gained this year en route to 22,000, makes about 60 percent of its sales overseas.
But those Democrats who think government should fine-tune everything are natural protectionists and probably think Trump is too fainthearted because he is not protecting Americans from competition from Americans. This neglect might be changing, thanks to West Virginia’s Gov. Jim Justice. Elected as a Democrat nine months ago, Justice, a billionaire from the coal industry, announced at a Donald Trump rally that he had discovered that he is a Republican. Almost simultaneously, he asked for a $4.5 billion subsidy for the coal industry: Taxpayers everywhere should pay Eastern utilities $15 for every ton of Central or Northern Appalachian coal they burn. Justice said this is necessary for “national security,” the hitherto neglected menace being this:
Competition from more productive American mines is endangering America by threatening the “survivability” of America’s Eastern coalfields, potentially putting America “at risk beyond belief.” Suppose, Justice says, terrorists disrupted the Eastern power grid and there were no abundant supplies of Eastern coal? So, channeling George Orwell, Justice says the subsidy is not a subsidy, it is a “homeland security incentive.” Trump surely will make a similar claim when he proposes to tax Americans who jeopardize America’s security by buying American refrigerators made with steel imports that delight America’s circling enemies by putting domestic steel mills “at risk.” Anyone who cannot make a similar argument against imports of Greek yogurt — “food security equals national security” — is a novice protectionist.