On Protectionism's Alleged "Conservativism"

A few weeks ago, I documented - in admittedly excruciating detail - the many failings of Donald Trump's anti-China trade policy.  Given Trump's magically evaporating poll numbers, the man himself is quickly becoming an afterthought in the US political discussion (thank goodness), but unfortunately his protectionist trade policy isn't making a similarly hasty retreat.  In fact, several misguided souls have taken to the interwebs to loudly defend Trump's indefensible (and hilariously hypocritical) stance on free trade.  I think that my original post and others like it handle a large majority of these defenses, so I won't rebut them here.  However, one new defense deserves further discussion because it comes from someone who really, really should know better - current trade lawyer and former USTR official (under Reagan) Robert Lighthizer - and whose argument rests not on the economic, strategic or moral strengths of Trump's grand plan, but instead on its alleged "conservativism" - something I superficially addressed in my original blog entry.

In today's Washington Times, Lighthizer argues that, while Trump's support for eminent domain abuse and universal health care might be liberal, his trade policy is actually quite "Republican" and "conservative":

Mr. Trump’s GOP opponents accuse him of wanting to get tough on China and of being a protectionist. Since when does that mean one is not a conservative? For most of its 157-year history, the Republican Party has been the party of building domestic industry by using trade policy to promote U.S. exports and fend off unfairly traded imports. American conservatives have had that view for even longer.

Lighthizer's op-ed essentially trots out two arguments to support his thesis that anti-China protectionism is a "conservative" policy.  First, he notes that lots of Republicans and Founding Fathers - like Hamilton, Clay and Lincoln, McKinley, Taft, Coolidge, Nixon and Reagan - supported protectionist policies, while liberals like FDR and Woodrow Wilson supported free trade.  Second, Lighthizer argues that anti-China protectionism is really, deep-down a "core conservative" principle:

On a purely intellectual level, how does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient? Markets do not run better when manufacturing shifts to China largely because of the actions of its government. Nor do they become more efficient when Chinese companies are given special privileges in global markets, while American companies must struggle to compete with unfairly traded goods.

Thus, Lighthizer concludes:

When viewed in this context, the recent blind faith some Republicans have shown toward free trade actually represents more of an aberration than a hallmark of true American conservatism. It’s an anomaly that may well demand re-examination in the context of critically important questions facing all conservatives on trade policy.

Given the current financial crisis and the widespread belief that the 21st century will belong to China, is free trade really making global markets more efficient? Is it promoting our values and making America stronger? Or is it simply strengthening our adversaries and creating a world where countries who abuse the system - such as China - are on the road to economic and military dominance? If Mr. Trump’s potential campaign does nothing more than force a real debate on those questions, it will have done a service to both the Republican Party and the country.

Now, leaving aside some of Lighthizer's more dubious assumptions - such as China's inevitable dominance or the pro-tariff motivations of certain conservative leaders - do either of his two primary arguments really hold water?  Is protectionism - in particular aggressive, unilateral trade action against China - really a policy that "true conservatives" should inherently embrace?

In short, no.  Of course not.

First, the idea that conservatives and Republicans should support protectionism - or any other policy for that matter - because certain of their former leaders did so is laughably misguided.  For example, President Nixon also supported economy-crushing wage and price controls, so should Republicans support those too?  President Eisenhower was a pretty big fan of the New Deal, so should conservatives support similar progressive expansions of the American welfare and regulatory apparatus?  (And let's not even get into some of the misguided policies of our antebellum conservative founders.)

Indeed, conservatives rightly advocate the exact opposite of such an approach to policy - a government, as arch-conservative John Adams famously quipped, "of laws and not men."  In that sense, conservativism and libertarianism, unlike progressivism, are not about discrete, ephemeral policies or individual leaders but instead about fundamental principles.  The policies and leaders change, but the principles are constant.  Among them are devout commitments to limited government, economic liberty, the free market and the rule of law.

Yet Lighthizer's anti-China protectionism reflects none of these principles.  As Dan Ikenson and I wrote a few months ago:

[V]oluntary economic exchange is inherently fair, benefits both parties, and allocates scarce resources more efficiently than a system under which government dictates or limits choices. Moreover, government intervention in voluntary economic exchange on behalf of some citizens necessarily comes at the expense of others and is inherently unfair, inefficient, and subverts the rule of law. At their core, trade barriers are the triumph of coercion and politics over free choice and economics. Trade barriers are the result of productive resources being diverted to achieve political ends and, in the process, taxing unsuspecting consumers to line the pockets of the special interests that succeeded in enlisting the weight of the government on their side.

Protectionism is akin to earmarks, but it comes out of the hides of American families and businesses instead of the general treasury. Policymakers on the right should support free trade because it is consistent with their principled opposition to higher taxes on American businesses and consumers and to big government telling people how and where they should spend their money. A vote for free trade is a vote to cut taxes and to get government out of the business of picking winners and losers in the market....

[W]hen people are free to buy from, sell to, and invest with one another as they choose, they can achieve far more than when governments attempt to control their decisions. Widening the circle of people with whom we transact brings benefits to consumers in the form of lower prices, greater variety, and better quality, and it allows companies to reap the benefits of innovation, specialization, and economies of scale that larger markets afford. Free markets are essential to prosperity, and expanding free markets as much as possible enhances that prosperity.

I recently applied these arguments to the very protectionism -  Trump's anti-China tariffs - that Lighthizer so vigorously defended:

[Protectionism is] the height of statist redistributionism. Trump forgets that American consumers are buying Chinese goods voluntarily - last time I checked China wasn't loading missiles with TVs and launching them into the US (although that would be kinda awesome). And he freely admits that the goal of his policy is to force American businesses and families to subsidize (by paying higher prices) that small minority of American manufacturers who directly compete with China. So not only is Trump saying that he knows better than us about what we should be consuming, but Trump's also saying that because we just can't help ourselves but buy cheap Chinese goods ("ooh, they're so cheap and pastic-y"), he has no choice but to enlist the full force of the US government to stop us from harming ourselves. President Trump will tell us to pay more for less in order to line the pockets of a select few because we're just too dumb and helpless, and we can't be trusted to make the decisions that he, and he alone, deems "right."

It's for our own good, you see. Now please someone, anyone, explain to me how this is the policy of a fiscal conservative?

(Answer: it's not.)

But hey, Presidents Taft and Nixon opposed free trade, so who cares about all those crazy principles, right?!

Lighthizer's second, "intellectual" argument in support of Trump-style, unilateral protectionism - that conservatives should support it because China is cheating at trade and destroying the American economy thereby - is equally problematic.  Leaving aside the economic illiteracy of this argument (cleverly captured today by Cafe Hayek's Don Boudreaux and also shown in my original blog post on Trump) or the fact the term "fairness" is a loaded term routinely championed by progressives and derided by conservatives (including Milton Friedman in this classic video), I'm frankly surprised that Lighthizer, an accomplished trade lawyer, would so freely allege that China is rampantly and wantonly engaging in "unfair" and "injurious" trade.

As he well knows, such terms have very precise meaning under US law, and by that metric - one that's extremely favorable for American companies, by the way - only a small minority of Chinese imports into the United States are "unfairly traded."  And according to the Petersen Institute's Gary Clyde Hufbauer and Jared Woollacott, the level of trade disputes between the US and China is quite "normal" given the nations' rapidly growing commerce (about 12% of total bilateral trade, similar to the US-Canada relationship in the late 1980s).  If Lighthizer and his clients would like to challenge the "fairness" of any of the other Chinese imports that American families and companies are voluntarily purchasing each year, they are certainly free to do so under the US anti-dumping or countervailing duty law (and, of course, they can challenge fairly-traded, surging Chinese imports under Section 421).  Heck, they can even lobby Congress to have US trade laws changed (again) to make findings of injury or unfair dumping or subsidization even easier.  Questionable economics aside, such actions are at least arguably "conservative."  But what clearly isn't conservative are public demands (or backroom lobbying requests) that our political leaders circumvent US law and global trade rules to implement protectionist tariffs by fiat based on unsupported allegations of "unfair" and "injurious" trade.

Even when such demands invoke the dear old ghost of William McKinley.