Free Trade versus Protectionism

There’s a growing anti-trade sentiment in our country. Much of the dialogue is grossly misinformed. Let’s try to untangle it a bit with a few questions and observations. First, does the U.S. trade with Japan and England? Put another way, is it members of the U.S. Congress trading with their counterparts in the Japanese Diet or the English Parliament? An affirmative answer is pure nonsense. When I purchased my Lexus, I had nothing to do with either the Japanese Diet or the U.S. Congress. Through an intermediary, a Lexus dealer, I dealt with Toyota Motor Corporation.

While it might be convenient to speak of one country trading with another, such aggregation can conceal a lot of evil, particularly when people call for trade barriers. For example, what would be a moral case for third-party interference, by either the Japanese Diet or the U.S. Congress, with an exchange between me and Toyota Motor Corporation? Some might reason that since Japan places restrictions on U.S. products entering their country, an appropriate retaliatory measure is not to allow Japanese products to freely enter the U.S. By the way, Japanese protectionist restrictions on rice imports force Japanese consumers to pay three or four times the world price for rice. How much sense does it make for Congress to retaliate against Japan by imposing restrictions on their products thereby forcing American consumers, say Lexus buyers, to pay higher prices? Should our rule be: If one country screws its citizens we should retaliate by screwing our citizens?