Why Trump, Sanders and Their Critics are Wrong on Protectionism

The presidential campaigns of Donald Trump and Bernie Sanders share a uniting theme of protecting American workers from foreign competition. Trump favors a 45% tariff on Chinese goods, while Sanders vocally opposes NAFTA-style trade agreements and the Permanent Normal Trade Relations (PNTR) designation (which prevents the US from imposing tariffs, on Chinese goods which other countries would not be subject to).

Critics such as Zack Beauchamp of Vox correctly point out that such measures would harm American consumers as well as the world’s poor. Trump’s proposed tariff would ultimately be passed on to the consumer, resulting in a price increase for many if not most consumer goods we buy. Additionally, American goods which previously could not compete with foreign goods will still be over-priced and subpar in quality, since protecting firms from competition does nothing to improve these things. While it may be nice to live in a gated community, only being able to do business with other members of said community would be a nightmare. Meanwhile foreign workers will be denied access to the world’s largest and most profitable market, thus harming the global economy, especially its most vulnerable people. Free exchange benefits those in greatest need and restricting it causes great harm to the global poor.

Unfortunately, Beauchamp and other critics of Sanders take for granted the assumption that opposition to NAFTA-style agreements is in and of itself opposition to free trade. In Sanders’s case it may well be true, but it need not be. Such agreements are largely “free trade” in name only. NAFTA for example contains over 2,000 pages of rules and regulations, which foremost benefit American firms and investors at the expense of foreign competitors and local populations. Most notoriously they expand and prolong American patents and copyrights, which keep useful developments out of the hands of firms and workers who would benefit from their use. It also cannot be overstated that such agreements unambiguously amount to US government meddling in economic the affairs of other countries and thus are a net expansion of government. Unsurprisingly such agreements tend to be quietly fast-tracked through Congress, thus bypassing any consent from the governed. Consequently, principled advocates of free trade dismiss so-called “Free Trade Agreements” as government-managed trade and corporatism.

Unilateral free trade is a more consistent and preferable alternative. Instead of having the American government meddling in the policies of other countries and sneaking rule-heavy agreements through Congress, Americans simply trade with anyone willing to do business with them. Ultimately this leaves the choice to the individual. If American individuals can enrich themselves through voluntary exchange with foreigners and vice versa, let’s not forbid it. This should include not only manufactured products but a free flow of workers, including highly paid ones such as doctors and lawyers, as well as  financial products such as insurance.

What the Trumps and Sanders of the world fail to acknowledge is that America does do better when people in countries like Mexico and China do better. A growing wealthy middle class in Mexico would be a boon to many American businesses, for example. Everyone benefits when the world’s poorest workers escape poverty. What the Zack Beauchumps get wrong is that the corporatist status quo is not free trade and equating one with the other white-washes a largely corrupt and unfree system.

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