On The Contrary, Mr. Trump, Free Trade Is Win-Win

Trump lights up Kaitlan Collins at CNN Town Hall. (Credit: CNN)

The third presidential candidacy of Donald Trump has reignited some bad memories of our previous national discussions on trade. Last night, while giving a speech in New Hampshire, the former president once again shared his views on trade as a form of conflict and belief that excessive imports were detrimental to Americans. Consequently, exchanging goods and services is being challenged, and once again, it requires defending.


I came across an excellent essay by one of my favorite contrarians, John Tamny, who wrote a piece published in RealClear Markets. Tamny makes reference to an article he recently read by Ross Kaminsky for The American Spectator. In it, Kaminsky defended the concept of trade. Still, as Tamny often makes clear, despite being an otherwise excellent defense of trade, Kaminsky fell into the common trap of acknowledging the so-called “losers” of trade. But as John Tamny points out, “With Free Trade, There Are No ‘Losers.”

And as Tamny often does, he gave his readers an example we can all relate to: eating. As humans, we all need to eat in order to survive. And how do we access a variety of foods we couldn’t produce ourselves? Through trade. The very act of trade is about improving our circumstances through the exchange of goods and services. It’s a win-win situation.

Tamny also points out that if you’re reading his article and mine, you are a beneficiary of free trade, whether you realize it or not. Without free trade, we wouldn’t have the technological advancements that allow us to communicate globally or access goods and services worldwide. Our existence would be “gruesomely primitive,” and we would probably be hungry all the time.

But Tamny brings it down to a more relatable level. Have you ever crossed town or state lines to get a better deal on an appliance or find better food? If so, congratulations! You are an ardent free trader. Thanks to technological and transportation advances, we now have a range of individuals and businesses competing to serve our needs, making us better off. So, if you’ve ever bargain-shopped or turned down a local restaurant with lousy service, you are a free trader.


Tamny also dismisses the demonization of “globalization,” arguing that it is simply an extension of the benefits of free trade. Technology and transportation advances have enabled the most talented producers in the world to compete to meet our needs. This competition brings better products and services and, logically, bigger bargains. So, every day we go to work, we are benefiting from global competition, which expands the purchasing power of our work.

But what about those who argue that free trade creates “losers” by crushing American companies and eliminating jobs? This is where Trump seems to get his hackles raised. However, Tamny quickly debunks this argument with a few examples. Consider that Netflix, Amazon, and Uber, all American companies, have put numerous other U.S. companies out of business. Most job-destroying advances, or what the Austrian-born economist Joseph Schumpeter called creative destruction, occur in the United States.

Tamny reminds us that, as consumers, we have the power to choose which businesses to support. We dictate which businesses will survive based on where we spend our dollars. Blaming dying industries and job obsolescence on foreigners is misguided. We, the consumers, decide the fate of businesses and jobs at home and abroad.

As for the loss of factory jobs in small towns, the nostalgists who lament the decline of factory work never actually worked in them. Tamny points out that the living standards of those factory workers were a fraction of what people in those towns enjoy today. Free trade has actually freed Americans from work that offered low living standards.


Tamny concludes that free trade is nothing more than workers exchanging their labor for what they don’t have, with others doing the same. And this exchange creates no losers. So, the next time someone tells you that there are losers in trade, remember the truth. Contrary to what the critics say, trade is not a zero-sum game. It is a win-win game.



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