Retreat from free trade? Prepare for $2,000 iPhones, strained economy

Two major presidential candidates from different parties have launched assaults against the same enemy this election cycle, albeit for very different reasons. Donald Trump has constantly railed against free trade agreements during his campaign, asserting that they were bad deals for the U.S. On the Democratic side, Bernie Sanders — whose insurgent campaign is likely all but over — has similarly attacked free trade agreements as bad for this country.

Both candidates are pandering to those who hold outdated, simplistic views of the economy and international trade. Their arguments might appeal to their own partisan base, but they don’t have much grounding in reality. The reality is that free trade is not some recent invention created by lobbyists to benefit large corporations. It has long been a part of American culture dating back to our very founding. Indeed, it’s worth remembering that a large part of the reason for the nascent American revolution turning toward independence was unreasonable restrictions on colonial trade by the British. Throughout American history, there have been strong advocates for free trade in both parties.

A protest against the outsourcing of jobs by the air conditioner manufacturer Carrier at the Statehouse in Indianapolis, Indiana, last month. Aaron P. Bernstein | Reuters

A protest against the outsourcing of jobs by the air conditioner manufacturer Carrier at the Statehouse in Indianapolis, Indiana, last month. Aaron P. Bernstein | Reuters

In Trump’s case, he is opposing free trade from a nationalistic point of view: That encouraging trade with other nations has been detrimental to American industry and manufacturing. He has advocated for imposing large tariffs on goods manufactured overseas in order to make it easier for American-manufactured goods to be competitive — an approach that naively assumes trade is a zero-sum game. Unfortunately, imposing steep tariffs would be less likely to result in a rebirth of American manufacturing than it would be to hinder American innovation. After all, many American companies rely on cheap foreign labor to produce the goods invented here. An iPhone could cost as much as $2,000 rather than the current $650 if it were built entirely in the U.S. So, prices of these innovative products would increase for all customers, and that would hurt both the companies and consumers.

Bernie Sanders takes his opposition to free trade from a different point of view: That the United States shouldn’t sign free trade agreements with countries that don’t live up to U.S. standards on wages, environmental policy, and other regulations. Sanders is, essentially, arguing that the U.S. should only trade with the developed world, which even liberal commentators acknowledge would hurt some of the planet’s poorest people. In embracing this approach, Sanders is arguing for using a form of economic imperialism to assert our values on the rest of the world.

While both of these approaches might sound reasonable on their face, both would hurt the U.S. economy and economies around the world more than they would help them. The much-maligned NAFTA has led to increased trade among Canada, Mexico, and the U.S., which helps the economy of each country involved. Similarly, free trade agreements with the developing world not only provide U.S. companies with cheaper labor, but also new markets to which they can sell their goods. Without free trade, it’s hard to see how Apple could have become the behemoth it is today.

This isn’t to say that the United States should blindly agree to every new free trade agreement that comes its way. Each agreement should be carefully examined by Congress and considered on its individual merits. If members come to the conclusion that a particular agreement does more to hurt their constituents than to help them, they should of course vote against it. However, any general retreat from free trade and embrace of protectionism should be rejected as a step backward for the U.S. and the world.

Jim Fossel

About Jim Fossel

Originally from Alna, Jim Fossel has volunteered with a number of campaigns over the years, including for Peter Mills for Governor in 2006. He previously worked for U.S. Senator Susan Collins and House Republican Leader Josh Tardy.