Free trade is like free love. If you have different sex partners, you need protection. If you have different trading partners, you need protectionism.
Failure to take this precaution will expose your nation to Acquired Industrial Deficiency Syndrome, in which manufacturing muscle is replaced by service sector fat and the body becomes vulnerable to such parasites as derivatives traders and hedge fund managers.
As young cells struggle on low wages, a greater proportion of the body’s energy (Social Security and Medicare payments) is used to sustain old and dying cells.
Congratulations, you have officially failed Microeconomics 101. If you want to pass, you should learn a few basics, such as:
• Trade is mutually beneficial.
• Protectionism doesn't work.
• The world
hasa system for protecting trade. One major component is the WTO. The US, by the way, wins about 90% of cases it brings to the WTO.
• Manufacturing output in the US is near record high levels. We just don't need
people to make stuff. We use robots instead.
• The United States exports
massive amounts of goods and services -- $2.3 trillion in exports in 2017 alone. That's a lot of American jobs.
• What's good for the goose is good for the gander. If the US would benefit from loading up on protectionism (and thus presumably reducing imports), then so should our trading partners, which means less US exports (whoops), more expensive goods and services (everyone
loves paying more), and more automation ("I, for one, welcome our new robot overlords")
• The service sector is really, really important.
- Ever been to a hospital? Yep, that's in the service sector.
- Have you ever bought or sold stock? Financial services.
- Do you use credit cards, or have a bank account? Yep, that's services.
- Ever watch a movie, or TV? Listen to music? Surf the Internet? Yes, that's all services.
• The 1950s ideal about the US as a manufacturing paradise? Yeah, that's kind of a lie. Our biggest competitors either had their industrial capacity utterly destroyed by WWII (Germany, Japan, UK etc) or had not yet developed (China). American manufacturers did a crappy job with constant labor strife and poor incentives to innovate, and only got away with it due to a temporary monopoly on the market. Once foreign competition recovered, American manufacturers could barely keep up, and had to significantly up their game (mostly to the benefit of their consumers) to stay in business.
• Social Security doesn't have a problem because we've shifted to a service economy. It has a problem because
birth rates have been low for years, while
people live longer. The costs go up, but we have fewer people to pay for it. That's a problem of demographics (and income inequality), not trade.
It's true that free trade is not 100% perfect and painless. It can be terrible when an industry leaves town, and nothing takes its place. However, the solution to dislocations caused by innovation and trade is not to punch our allies in the gut, dig a hole, jump into it, stomp your feet and shout "it's not fair!" The best thing to do is help our workers deal with new economic realities, and work with our allies to apply
rational pressures on problematic trading partners.
