Thursday, March 22, 2018

Trade Wars

Current "free trade" agreements are mostly anything but and it isn't the case that reducing tariffs is always good, but one good thing (if not quite as unambiguously good as proponents would say, either) about trade agreements is that they do reduce trade wars, which tend to lead to concentrated pain for targeted industries and workers.

U.S. subsidies for its soybean farmers have given them an unfair competitive advantage in selling to China and strong restrictive measures need to be taken to prevent dumping, Chinese tabloid Global Times said in an editorial on Wednesday.

One great myth of America is that our great capitalist nation, unlike other countries, does not subsidies specific industries. They engage in national industrial policy, while we do not. I don't care about the merits of China's complaint because I think all of this is basically bullshit. We subsidize lots of things, they subsidize lots of things, and lots of polite fictions keep us pretending otherwise. But if the trade war is on, it's on.