Jun 08, 2018
American Trade Should be Driven by Freedom
Post by Freedom Partners
Trade is a key element of our economy and promotes the well-being and prosperity of Americans. Empowering individuals, companies, and countries to exchange goods and services creates jobs, fuels businesses, and allows consumers to access a wide variety of goods. As trade disputes arise, however, policymakers consider enacting barriers to trade such as tariffs. These policies only cause self-inflicted harm and hurt American workers, businesses and consumers.
For a thriving economy and more prosperous nation, the United States should look to embrace trade. Here is a list of principles policymakers should look to as they work to advance U.S. trade policy:
- Individuals, businesses, and countries should be free to engage in the voluntary exchange of goods and services. This practice improves lives by growing the economy, increasing pay checks, and creating new and better jobs.Trade is mutually beneficial to all involved, as it allows businesses and individuals to focus on what they do most efficiently and trade for things that others do at a lower cost. Trade also expands the variety of goods and services available to consumers, and is responsible for lifting millions of Americans out of poverty, improving our standard of living, and modernizing our economy. Tariffs and other protectionist policies, on the other hand, are a tax on consumers and businesses that limit economic opportunity and stifle growth.
- It should be individuals and businesses in a competitive market that guide trade decisions, not government bureaucrats or politicians.Competition encourages businesses to constantly innovate and find more efficient and affordable ways to conduct business. Trade policy that embraces competition will not favor one business or industry over another, not manage international trade through arbitrary targets, and will ultimately help fuel economic growth.
- Consumers, workers, and businesses are harmed the most by punitive actions such as tariffs and quotas. Such action should be eliminated.Barriers to trade such as like tariffs and quotas suppress opportunity, prosperity, and well-being. They punish consumers, workers and business owners. They also create artificial winners and losers.Open trade, instead, offers a win-win that delivers the best results for the most people.
- Subsidies and other types of government supports for powerful and politically connected businesses and industries do NOT create value. They punish consumers, and insulate businesses from market competition.Congress should end this kind of corporate welfare that comes at the expense of consumers and not politically-favored businesses.
- Trade disputes should be resolved through existing international trade agreements and organizations.International trade agreements and organizations are a better way for government to handle trade disputes than enacting new barriers to trade.
- 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.
To ensure trade policy is a consideration only in truly narrow national security matters, Congress should revisit trade authority granted to the executive branch, and implement a check and balance in which tariffs must pass an amendment-free up-or-down vote, and require thorough analysis to ensure that national security risks are rigorously assessed.
With America’s prosperity in the balance, policymakers must be careful not to build barriers to trade, but instead promote more open trade that benefits American businesses, workers, and households to whom trade is so important. Read our full principles here.