Dan Hannan: Trump's protectionism will hurt working people

Source: Washington Examiner | January 16, 2017 | Dan Hannan

Of all the ideas associated with the incoming president’s economic policy, the oddest is that his hostility to free trade is somehow driven by concern for the little guy. In fact, unrestricted commerce always raises living standards for the masses, while tariffs and quotas take from the many to give to the few.

Consider, to pluck an example more or less at random, the sugar lobby. At every election, sugar producers donate millions of dollars to candidates from both parties, and spend millions more in direct lobbying. In consequence, Congress maintains import restrictions which result in domestic sugar being roughly twice as expensive as sugar sold abroad. This is, obviously, good news for some American sugarcane planters, notably the largest and most politically active: Around 40 percent of the benefit goes to 1 percent of the growers.

There is, however, a cost to everyone else. Confectioners find that they cannot compete: Several candy plants have relocated to Canada, citing the high price of U.S. sugar. Their losses far outweigh the sugarcane producers’ gains. A 2013 study found that removing all import quotas would destroy 2,700 jobs in farming, but would create 18,000 jobs in the food industry.

Here’s the problem, though: The 2,700 are already working, and will likely vote accordingly; the 18,000, by contrast, don’t yet know who they are. If you were a candidate for office, whom would you appeal to — the 2,700 real-life workers, or the 18,000 who exist, so to speak, only in the subjunctive? Especially when the sugar producers are concentrated in the swing state of Florida, whereas the putative food processors are dispersed all over the country.

In coldly electoral terms, Donald Trump’s protectionism made sense. He understood, for example, that there were many thousands of steel-related jobs across Michigan, Ohio, Pennsylvania and West Virginia. Restricting imports from Mexico and China would indeed protect some of those jobs. But at what cost to the United States as a whole?

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You might argue, of course, that GDP growth isn’t everything. You might believe that some jobs are intrinsically more valuable than others — though, even here, it would be far cheaper to subsidize farmers, steelworkers or other favored groups than to raise prices for everyone else. You might, like both candidates at the recent presidential election, care disproportionately about the jobs in certain battleground states. Fine — that’s democracy. But, please, stop pretending that you’re standing up for working people when, in truth, you’re doing the opposite.

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