True Free Trade Doesn’t Exist, But It Should

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Wednesday, August 22, 2018


A consensual exchange between two people produces wealth. Taxes, regulations, and other interferences by government hurt both parties in a transaction by artificially increasing costs.  Conservatives have traditionally championed freedom of choice when it comes to economic transactions, but support for tariffs has recently drifted into the mainstream.

Tariffs provide protection for a minority and create an aggregate cost to the nation as a whole. For example, the recent tariffs on aluminum and steel imposed by the Trump administration are estimated to create thousands of jobs. However, that same study found that for every job gained, as many as 18 would be lost. Tampering with the economy by imposing taxes always creates a loss in potential economic prosperity.

Another example is Japanese beef tariffs. They hurt Japanese citizens, especially the poor, by raising prices. They are intended to protect domestic farmers from competition, but if Japanese beef is truly worth more money, consumers who can afford it would spend the extra money on it.

Tariffs are a tax on imports, but are paid for by consumers. Conservatives generally oppose tariffs because they are a tax and create macroeconomic deviations from free market conditions. There are, however, two reasons free market conservatives may threaten to levy tariffs.

Threatening tariffs can serve as leverage in negotiations to convince other countries to eliminate their own tariffs. In that case, tariffs are only threatened or implemented for a short time. The other reason conservatives use tariffs is to pressure oppressive states to stop Human Rights violations. The Trump administration’s tariffs could arguably be intended to lower other countries’ tariffs on imports from the U.S. Some of the administration’s rhetoric suggests just that. Other times it indicates that “fair trade” deficits are the real goal.

Fair trade is the notion that trade is only fair when the balance of trade between two countries is even. It assumes that, by having a trade deficit, a country is worse off or losing something. Following that line of thinking, tariffs, quotas, and other forms of protectionism can help rectify unfair trade imbalances.

American conservatives usually see past this by understanding that trade deficits do not actually make anyone worse or better off. Like the workings of the market as a whole, trade is not a zero-sum game; there are no winners and losers when consenting individuals exchange labor, services, and capital in mutually beneficial ways. A commonly used example is the relationship between an individual and their supermarket. Unless someone is a distributor or farmer, he or she has a trade deficit with the grocer; they buy more than they sell to the supermarket. The consumer is not worse off by spending money on food. In fact, they are better off as a result. In that respect, conservatives do not hold on to the ideology of fair trade.

Despite a global trend toward freer trade over the past century, true free trade doesn’t exist. The World Trade Organization, an organization whose “goal is to ensure that trade flows as smoothly, predictably and freely as possible,” has established tariff guidelines for countries to follow and enshrined the protection of certain industries.

Even supposed free trade agreements between friends and allies are riddled with exceptions. The European Union, its allies in East Asia, and other trading partners still have heavily protected industries, from beef in Japan to produce in France.  

Any action by conservatives in government should seek to eliminate tariffs. In response to President Trump’s newly announced tariffs, Canada, the European Union, Japan and other allies voiced strong opposition.

If the goal of President Trump’s administration is to ultimately eliminate restrictions to trade, tariffs can be justified by conservative standards. However, the tariff plan is sometimes said to be aimed towards reducing trade deficits, a far cry from true conservatism.

Regardless, foreign leaders’ criticism of the Administration is hypocritical because they have pursued retaliatory tariff policies in their own countries. There is certainly a double standard on the left when it comes to Trump’s policies, and a similar double standard is starting to emerge from those on the right that defend him no matter what.

Unfettered free trade is the gold standard because it maximizes prosperity and freedom by allowing consumers to choose how to spend their money. Free trade is a utilitarian and moral pro-choice policy, and American lawmakers should advocate for it at all costs.

Matt Noyes is a New Hampshire native and recent graduate of SUNY Albany where he was notorious for being an outspoken conservative. He has written for Campus Reform, the Albany Student Press, and founded the Turning Point USA chapter at SUNY Albany. He will be starting a job in Tokyo, Japan in August.

The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.


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About Matthew Noyes

SUNY Albany

Matt Noyes is a New Hampshire native and recent graduate of SUNY Albany where he was notorious for being an outspoken conservative. He has written for Campus Reform, the Albany Student Press, and founded the Turning Point USA chapter at SUNY Albany. He will be starting a job in Tokyo, Japan in August.

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