Libertarian Views

by Greg Davies

Our Trade with China

without comments

There is a commonly held belief that our trade with China is somehow damaging to American interests, and that the government should take steps to make this country less dependent on the Chinese.

One reason for this is the fear of a trade deficit. Clearly, our imports from China far exceed our exports to China. However, nobody is being forced to buy Chinese. The trade with China is being done according to how the two countries can get maximum benefit. Besides that, the U.S. is getting something valuable, while all the Chinese get in return is money, which functionally isn’t worth its weight in toilet paper.

Another complaint about trade with China is the morality of trading with a country that oppresses its citizenry. Although this point might seem valid, the reality is that trading with the Chinese is a way to improve the country. When businesses trade with a country with limited economic freedoms on free-market terms, that doesn’t corrupt the United States any, but it does corrupt China’s government controls on economy. This is the reason for China’s rapidly expanding economy and reduction in poverty. International trade is one of the only types of foreign aid that actually works.

Possibly the most personal complaint that people have against foreign trade is that outsourcing of jobs takes those jobs away from Americans who need them. Seeing people we know lose their jobs certainly has more immediacy than any of the positive benefits of foreign trade. However, the loss of a job here creates benefits elsewhere. Furthermore, part of remaining competitive in the global economy means holding American workers to high standards. If the government needs to shield American workers from overseas competition, then the lower standards imposed on Americans will ultimately hurt the country more than it helps us.

Overall, foreign trade benefits the country and talk about the need to close the trade deficit is misguided.

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Written by Greg Davies

September 26th, 2008 at 2:35 pm

Posted in General

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