Donald Trump is a Protectionist

Today, presidential candidate Donald Trump published another policy paper: Reforming the U.S.-China Trade Relationship to Make America Great Again.

I already knew Trump was a protectionist from reading his book:

Fourth, it’s time to get tough on those who outsource jobs overseas and reward companies who stay loyal to America. If an American company outsources its work, they get hit with a 20 percent tax. For those companies who made the mistake of sending their businesses overseas but have seen the light and are ready to come home and bring jobs with them, they pay zero tax. Bottom line: hire American workers and you win. Send jobs overseas, and you may be fine, but you will pay a tax. Also, I want foreign countries to finally start forking over cash in order to have access to our markets. So here’s the deal: any foreign country shipping goods into the United States pays a 20 percent tax. If they want a piece of the American market, they’re going to pay for it. No more free admission into the biggest show in town—and that especially includes China. [emphasis added]

Trump has now both denied and reiterated his protectionism in today's policy paper:

America has always been a trading nation. Under the Trump administration trade will flourish. However, for free trade to bring prosperity to America, it must also be fair trade. Our goal is not protectionism but accountability. America fully opened its markets to China but China has not reciprocated. Its Great Wall of Protectionism uses unlawful tariff and non-tariff barriers to keep American companies out of China and to tilt the playing field in their favor. [emphasis added]

And what will Trump do because China hasn't reciprocated American free trade policies with their own? His clearly written policy is to impose protectionist duties:

On day one of the Trump administration the U.S. Treasury Department will designate China as a currency manipulator. This will begin a process that imposes appropriate countervailing duties on artificially cheap Chinese products

This is a bad idea, as was explained in 1845 by Claude Frédéric Bastiat. I find it interesting that would-be economic leaders, seeking to "make America great again", do not bother to read economics and find out why their plans will actually harm America, as a Frenchman already explained 170 years ago. This is old news – but Trump doesn't know it. Why not? Something's really going wrong here.

Bastiat's explanation is well done. It's clear, easy to read, makes sense, and covers the issue. What more do people want? He actually has a lot of material of this quality which the modern world is ignoring. Here is the specific essay, in full, which Trump's ignorant and destructive policy plans reminded me of. Look how exactly Trump is advocating the same mistake Bastiat addresses. (And Trump has no counter argument to Bastiat, no better ideas to offer. Just ignorance.)

Note that Bastiat has already explained why protective tariffs or duties are bad in previous essays. And Trump claims to know those are bad in general, which is why he denies being a protectionist. The reason Trump advocates protective duties against China is that China doesn't practice free trade itself. Trump claims that free trade is good, but it needs to be mutual. This issue is exactly what Bastiat addresses:

The Bastiat Collection, Part VI, chapter 10, Reciprocity:

We have just seen that whatever increases the expense of conveying commodities from one country to another— in other words, whatever renders transport more onerous—acts in the same way as a protective duty; or if you prefer to put it in another shape, that a protective duty acts in the same way as more onerous transport.

A tariff, then, may be regarded in the same light as a marsh, a rut, an obstruction, a steep declivity—in a word, it is an obstacle, the effect of which is to augment the difference between the price the producer of a commodity receives and the price the consumer pays for it. In the same way, it is undoubtedly true that marshes and quagmires are to be regarded in the same light as protective tariffs.

There are people (few in number, it is true, but there are such people) who begin to understand that obstacles are not less obstacles because they are artificial, and that our mercantile prospects have more to gain from liberty than from protection, and exactly for the same reason that makes a canal more favorable to traffic than a steep, roundabout, and inconvenient road.

But they maintain that this liberty must be reciprocal. If we remove the barriers we have erected against the admission of Spanish goods, for example, Spain must remove the barriers she has erected against the admission of ours. They are, therefore, the advocates of commercial treaties, on the basis of exact reciprocity, concession for concession; let us make the sacrifice of buying, say they, to obtain the advantage of selling.

People who reason in this way, I am sorry to say, are, whether they know it or not, protectionists in principle; only, they are a little more inconsistent than pure protectionists, as the latter are more inconsistent than absolute prohibitionists.

The following apologue will demonstrate this:

STULTA AND PUERA

There were, no matter where, two towns called Stulta and Puera. They completed at great cost a highway from the one town to the other. When this was done, Stulta said to herself: “See how Puera inundates us with her products; we must see to it.” In consequence, they created and paid a body of obstructives, so called because their business was to place obstacles in the way of traffic coming from Puera. Soon afterwards Puera did the same.

At the end of some centuries, knowledge having in the interim made great progress, the common sense of Puera enabled her to see that such reciprocal obstacles could only be reciprocally hurtful. She therefore sent an envoy to Stulta, who, laying aside official phraseology, spoke to this effect: “We have made a highway, and now we throw obstacles in the way of using it. This is absurd. It would have been better to have left things as they were. We should not, in that case, have had to pay for making the road in the first place, nor afterwards have incurred the expense of maintaining obstructives. In the name of Puera, I come to propose to you, not to give up opposing each other all at once—that would be to act upon a principle, and we despise principles as much as you do—but to lessen somewhat the present obstacles, taking care to estimate equitably the respective sacrifices we make for this purpose.” So spoke the envoy. Stulta asked for time to consider the proposal, and proceeded to consult, in succession, her manufacturers and agriculturists. At length, after the lapse of some years, she declared that the negotiations were broken off.

On receiving this intimation, the inhabitants of Puera held a meeting. An old gentleman (they always suspected he had been secretly bought by Stulta) rose and said: The obstacles created by Stulta injure our sales, which is a misfortune. Those we have ourselves created injure our purchases, which is another misfortune. With reference to the first, we are powerless; but the second rests with ourselves. Let us, at least, get rid of one, since we cannot rid ourselves of both evils. Let us suppress our obstructives without requiring Stulta to do the same. Some day, no doubt, she will come to know her own interests better.

A second counselor, a practical, matter-of-fact man, guiltless of any acquaintance with principles, and brought up in the ways of his forefathers, replied: “Don’t listen to that Utopian dreamer, that theorist, that innovator, that economist, that Stultomaniac. We shall all be undone if the stoppages of the road are not equalized, weighed, and balanced between Stulta and Puera. There would be greater difficulty in going than in coming, in exporting than in importing. We should find ourselves in the same condition of inferiority relatively to Stulta as Havre, Nantes, Bordeaux, Lisbon, London, Hamburg, and New Orleans are with relation to the towns situated at the sources of the Seine, the Loire, the Garonne, the Tagus, the Thames, the Elbe, and the Mississippi, for it is more difficult for a ship to ascend than to descend a river. (A Voice: Towns at the mouths of rivers prosper more than towns at their source.) This is impossible. (Same Voice: But it is so.) Well, if it be so, they have prospered contrary to rules.” Reasoning so conclusive convinced the assembly, and the orator followed up his victory by talking largely of national independence, national honor, national dignity, national labor, inundation of products, tributes, murderous competition. In short, he carried the vote in favor of the maintenance of obstacles; and if you are at all curious on the subject, I can point out to you countries where you will see with your own eyes Road-makers and Obstructives working together on the most friendly terms possible, under the orders of the same legislative assembly, and at the expense of the same taxpayers, the one set endeavoring to clear the road, and the other set doing their utmost to render it impassable. [emphasis added]

Trump is that second counselor. He still hasn't thought of an answer to the old gentleman. And who, exactly, is asking him to?