Imports Raise Americans’ Standard of Living
The benefits of open trade to Americans are immense. By the early 2000s, the typical American family benefited by around $10,000 thanks to reductions in trade barriers around the globe after World War II.
Yet these benefits are often ignored in the current debate over trade. In fact, today’s debate sometimes gets things completely backward, particularly the argument that trade deficits with other countries are harmful.
In the simplest of terms, a trade deficit means Americans as willing buyers have chosen to buy more stuff they value from willing sellers. Think about it. You run a trade deficit with your grocer: You buy food from them, but they don’t buy anything from you. And yet, you’re both better off for it. When the U.S. economy is strong, and Americans are enjoying rising wages, they tend to purchase more – of both imports and domestic goods. This reality helps to explain why our trade deficit with China is much larger today—when our economy is strong and unemployment is near historic lows—than during the Great Recession.
Protectionism Doesn’t “Protect” the United States – At All.
Competition is the key to innovation—and both increase with more trade, to the benefit of the U.S. as a whole. For example, a 2015 study found innovation was higher among firms that were more exposed to Chinese imports than those that weren’t. Another study found that the economic welfare of people in the U.S. is 50% higher than if we were closed to trade.
On the other hand, protectionist policies that limit competition also limit innovation, harming everyone—including those they are intended to help—in the process.
Protectionism doesn’t protect the U.S. at all. Tariffs, quotas, and other protectionist policies harm every American, while competition and innovation driven by trade benefit us all.
We should embrace the future and remain open to trade with other countries, not close ourselves off from the world.
The United States should eliminate all trade barriers, regardless of other countries’ trade policies, in order to provide Americans lower prices, more jobs and bigger paychecks, and to drive innovation through competition.
Individuals and businesses in a competitive market, not government bureaucrats or politicians, should guide trade decisions.
Restrictive measures such as tariffs and quotas reduce living standards and are an unjust government intrusion into the lives of hardworking Americans.
Subsidies and other forms of government supports for powerful and politically connected businesses and industries do not create value. They punish consumers, burden taxpayers, insulate businesses from market competition, and should be eliminated.
Trade disputes should be resolved through existing international trade agreements and organizations
While national security interests may be a consideration in trade policy, they should be used to restrict trade only when there is truly a narrow national security interest at stake, not as a work-around to impose tariffs.