Home
/
RELIGION & LIBERTY ONLINE
/
Reviving the spirit of free trade
Reviving the spirit of free trade
Dec 26, 2025 4:09 AM

The current support for tariffs in the United States has left me disappointed, frustrated, and in many unproductive debates. The French political philosopher, Frédéric Bastiat, best articulated my sentiments in an 1847 letter to Richard Cobden, “And I want not so much free trade itself as the spirit of free trade for my country. Free trade means a little more wealth; the spirit of free trade is a reform of the mind itself, that is to say, the source of all reform.”

What I want for the United States in 2019 is a return to, or maybe even a discovery of, the “spirit of free trade.” You might ask, what is the “spirit of free trade”? I would infer that Bastiat means a respect for private property, the Rule of Law, and a general understanding that mutually agreed upon trade makes people better off and promotes peace.

President Trump has now put in place tariffs on Chinese goods valued over $200 billion. The most popular reasons argued on behalf of these tariffs are (1) the Chinese are stealing our intellectual property, (2) our trade deficit is too high, and (3) the Chinese are engaging in unfair business practices.

Let’s consider these arguments in reverse order.

Since taking office as President, Donald Trump has frequently lambasted China for engaging in unfair business practices. In early 2018 he made the strong statement, “From now on, we expect trading relationships to be fair and to be reciprocal.” Why is this desirable? As Jeffrey Dorfman, economics professor at University of Georgia says, “It is trade which looks the most unfair that creates the most benefits because the potential gains are the largest.”

When countries specialize in what they are relatively better at (i.e. parative advantage), it allows persons within a country to consume more of all products. When China specializes in parative advantage and the U.S. does the same, we both e better off when we trade with each other for those goods that we did not produce. When tariffs are imposed, restricting trade between countries, it forces each country to allocate resources to what they are relatively worse at producing (where they have parative disadvantage). This disproportionately harms low wage earners. Research has shown that free trade most helps the poor as they purchase relatively more imported goods. As Acton Institute’s director of research, Samuel Gregg, states in a recent article at Law & Liberty, “The more we (America and Americans) can import, the better off we are in terms of material prosperity.”

When the U.S. trades freely with other countries it allows us to play to parative advantage, which benefits both consumers and producers in the United States as well as individuals in the countries that we trade with.

Another frequently cited argument is that our trade deficit is “too high”. We first need to consider what a trade deficit is. A trade deficit in the United States occurs when the cost of our imports exceeds the value of our exports. Many, including President Trump, think a large trade deficit to be bad for the American economy and jobs. This simply isn’t true. The U.S. has run consistent trade deficits since 1976, importing $6 trillion worth of goods more than we have exported. This has had little to no negative impact on jobs (see charts). This shows that running a trade deficit impacts the types of jobs and growth in our economy, not the number of jobs or size of growth.

Finally, let’s consider what has e the loudest, most cited argument, in recent months. China is stealing “our” intellectual property and we need to impose tariffs – in the order of $250 billion – to convince them to stop.

In a recent essay, free trade advocate Don Boudreaux listed six convincing arguments against imposing high tariffs as a result of alleged Chinese intellectual property theft.

Two of Boudreaux’s six arguments are worth restating here.

First, “President Trump’s tariffs are first and foremost punitive taxes on Americans who buy imports from China.” When the U.S. government imposes punitive taxes on American citizens through high tariffs on foreign goods they are, in essence, attacking private property. They are confiscating resources from the majority of citizens for the benefit of a few – typically large businesses with successful lobbying firms.

Second, “American victims of China’s IP theft could avoid much of this theft simply by refusing to do business in China.” The decision should be left to particular corporations on whether they want to do business in the Chinese market at the risk of forfeiting their intellectual property. In addition, for cases where China is legitimately stealing intellectual property from U.S. businesses operating outside of China, there is already a process set up to handle these disputes through the World Trade Organization. We should use this process for recourse rather than imposing punitive tariffs that harm Americans.

Tariffs hurt the average person. They hurt you and me, decreasing our quality of life and the value of our dollars. In a 2016 article released by the World Trade Organization (WTO), Maurice Obstfeld said, “those who promote “getting tough” with foreign trade partners through punitive tariffs should think carefully. It may be emotionally gratifying; it may boost specific industries; the threat may even frighten trade partners into changing their policies; but, ultimately, if carried out, such policies cause wider economic damage at home.”

This past week, my dad and I ventured into a family owned bicycle store near my Fort Wayne childhood home to purchase a bicycle for my mother. The owners, a husband and wife team, mentioned they are struggling to appropriately price their bicycles because of the recent tariff increases on aluminum and steel, among other consequences of the growing trade war. They mentioned there is a chance their bicycles could increase in price by 25 percent this year. If you run a small business, you can understand how difficult this makes planning for the year ahead.

Tariffs, for any reason, might prove to make specific corporations in the United States better off, but they make the average person worse off. The mother who simply wants to buy her child a bicycle for their birthday might no longer be able to do so. President Trump’s trade policy is benefitting the politically connected minority at the expense of the majority. Yes, I want free trade, but what I want more is for Americans to restore “the spirit of free trade” in 2019.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Vatican Releases Note on Global Financial Reform
This morning the Pontifical Council for Justice and Peace issued a bold statement advising how to bring order to the global financial crisis. I was in attendance at the much anticipated press conference that was organized to debrief reporters on the statement’s content. The statement came in the form of a “Nota” (“Note” in Vatican terms): Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority. The President and Secretary of the Council, together with...
Nothstine on Occupy Wall Street’s Utopian Aims
New polling data on the Occupy Wall Street protesters (HT: blog) shows that the “movement” isn’t exactly representative of America’s downtrodden: Rather, prises an unrepresentative segment of the electorate that believes in radical redistribution of wealth, civil disobedience and, in some instances, violence. Half (52%) have participated in a political movement before, virtually all (98%) say they would support civil disobedience to achieve their goals, and nearly one-third (31%) would support violence to advance their agenda. The vast majority of...
Samuel Gregg: Two Useful Moments in Last Night’s Debate
Acton’s director of research Samuel Gregg’s reaction to last night’s GOP presidential debate is up at NRO’s The Corner. Like most people who saw the debate, he didn’t like the childish bickering, of which he says “the trivializing effects upon serious discussion are hard to deny.” “There were, however, two useful moments,” he says: One was several candidates’ efforts to put the contemporary disease of identity politics in its appropriate place (i.e., the grave). The second was a number of...
Jim Wallis Speaks to Grand Rapids’ Aged
Jim Wallis, the author, public theologian, speaker, and mentator behind the Christian Left’s Circle of Protection, was in Grand Rapids last night, and I went to hear him speak. Wallis was presented as the latest in a long line of progressive luminaries to speak (or play their guitars) at the Fountain Street Chruch: Eleanor Roosevelt, Clarence Darrow, Margaret Sanger, Malcolm X, Gloria Steinem, U2, and the Ramones have all appeared on the same dais. He was introduced to speak about...
Marxism, Abortion among CCHD’s Poverty Strategies
The American Life League has released an investigative report on the United States Catholic Conference of Bishops’ Catholic Campaign for Human Development, which, it turns out, has been funding dozens of thoroughly unchristian organizations in its fight against domestic poverty. Catholics in the pews who have given to the annual CCHD collection might not be happy to learn that the program’s efforts are frequently right out of line with its “fight poverty: defend human dignity” slogan. At Acton, we believe...
Taxes Yesterday, Today, and Tomorrow
Amid the hustle and bustle of preparing for tonight’s Acton Institute annual dinner, I’m trying to carve out some time to make final preparations for my participation in the 9th Annual Christian Scholars’ Symposium hosted by the Christian Legal Society. Tomorrow afternoon I’ll be debating with Gideon Strauss of the Center for Public Justice on the question, “Justice, Poverty, Politics & the State: Is There a Christian Perspective?” One of the pressing issues related to the size and scope of...
Commentary: Rome and Moscow Make Common Cause
With Europe’s traditional moral framework – Christianity – under increasing attack, the Roman Catholic and Russian Orthodox churches are drawing closer in order bat the forces of secularism and “Christophobia.” Rev. Johannes L. Jacobse looks at efforts to set aside long held theological disputes and forge a unity of action on social questions. Subscribe to the free weekly ANC and other Acton publications here. +++++++++ With the Rise of Militant Secularism, Rome and Moscow Make Common Cause By Rev. Johannes...
The Pope and The CEO
Our good friend at the Seven Fund (and Acton Research Fellow in Entrepreneurship) Andreas Widmer, has released his book, The Pope and the CEO. Andreas tells stories of his journey from a Swiss Guard for John Paul II to an entrepreneur and business leader. Andreas tell of lessons he learned from the life and leadership of John Paul II that have shaped his life, his family, and his vision of work. The book is filled with practical advice from working...
EU Regulation Makes its Way to the US
The aggrandizement of the European Union’s powers, particularly of its regulation, has had a steadygrowth within Europe, and is now looking to move outside European borders. Namely in one American industry, the airline industry, passengers may soon be paying higher air fares, not because of factors within the American financial market, but because of a carbon emissions tax that the EU will be imposing on American airlines which service flights to EU member countries. For example, if an American carrier...
Vatican Economic Analysis Incomplete, Says Gregg
Acton’s director of research Samuel Gregg has provided his reasoned take on the new document from the Pontifical Council for Justice and Peace — it’s up at The Corner. While its diagnosis of the world economy is fairly accurate, the council’s treatment plan is lacking in prudential analysis. Gregg’s disappointment is expressed at the end: “For a church with a long tradition of thinking seriously about finance centuries before anyone had ever heard of John Maynard Keynes or Friedrich Hayek,...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved