With all the talk recently about the Trump Trade War and tariffs, I thought I’d explain my personal position. I’m gonna take some flack on this one from other libertarians. While I do not agree with President Trump’s tariff proposals, I am not opposed to the idea of tariffs as a form of tax. I understand it will be passed on to the consumer. But if I have to choose a tax, I like “low” tariff, even over a sales tax.
Why am I not a free trader even though I am a libertarian? Free trade is on one hand great, and on the other hand a myth. NAFTA (North American Free Trade Agreement) is thousands of pages long detailing trade restrictions in each and every sector. Calling it free trade is a misnomer. The U.S. does not practice free trade. Fair trade is mythical too….. as the term usually means it is advantageous to the poorer country. It is not “fair and equal.” Fair trade is nothing but a form of charity. A bad form.
It is better to allow funds/goods to flow based on supply and demand. Then allow citizens of each nation to direct their own charitable giving the way they see fit, instead of silently fleecing them in unbalanced trade deals. Who pays the balance? The American worker/taxpayer/consumer, that’s who! In job losses, wage stagnation, wage decreases, and tax subsidies levied against their paychecks and businesses. Fair Trade is allowing our government to choose other governments to be charitable too. Which is a bad idea. Let me explain.
Let’s say the U.S. decided to make a “fair trade agreement” with Venezuela. How much of the benefit would go to the people of Venezuela verses the government of Venezuela? The people would barely notice at all, as government bureaucrats would either waste or embezzle those funds long before they reached those in need. This is exactly what happened in New Orleans (after hurricane Katrina), Haiti, and in Puerto Rico too. Governments are inefficient and full of corruption, especially in poor countries. Corruption is one of the chief reasons poor nations are poor nations. I know there are oppressed peoples, but who are their oppressors? Usually their own government. And their government is the last group of people that our government needs to be giving money too.
US. Trade agents should negotiate based on America’s needs first, getting the best deal possible for their citizenry. Their first obligation is to the citizens of their own nation, whom they represent. When their own citizens are prosperous, then those good and generous free citizens decide how to direct their own charitable giving to the actual benefit of the poor of the world. This is why left/right statist proposals never work as intended, because government solves very few if any actual problems, and is in fact the source of many of our woes. And if they are not the source of our woes, often government action exacerbates them rather than helps.
This will be unpopular, but I think the proper response is a very low tariff that is equal for all nations friend or foe. Paid on all goods without exception as a market entrance fee. We should then eliminate the income tax on citizens. Free Trade is not the answer because we cannot find reciprocal partners. In theory it is the best way, but in reality it won’t work because it is utopian in nature. No one else in the world is really for free trade and all the “free trade” agreements are actually highly restrictive trade.
This proposal would make government pro-trade, less apt to go to war, much leaner as it would shrink government in size, pro-business in general, and allow citizens to keep all of their hard earned money, flushing the domestic economy with actual cash rather than just lowering the amount government takes. It would make Trade just…. not free or fair, or protected.
P.S. it is also close to the original way we did business in the world. You know, when we were a producing nation instead of a consuming nation. When we had the largest savings rather than the largest debt.