Donald Trump keeps bashing China. That's immoral.

Taken at face value, what Trump's really arguing for is not "free trade" or "fair trade" but no trade at all.

Donald Trump continues to blame China for the United State's problems.
(Image credit: AP Photo/Chris O'Meara)

America first, perhaps. But America only? That's the moral quandary raised by Donald Trump's protectionist attacks on free trade, particularly trade with China.

In speech after speech, and during the presidential debates, Trump argues that China and its supposedly brilliant trade negotiators have been "killing" America. The GOP presidential frontrunner claims that Beijing's superiority over Washington is evidenced by the massive trade deficit between the two nations, as well as the flow of U.S. manufacturing jobs to China during the 2000s. And until American workers have an "even playing field," President Trump would slap a big tariff on Chinese exports to America. President Trump would bring back manufacturing jobs. President Trump would bring back investment.

But Candidate Trump isn't making an argument just about economic policy. He's also de facto making an argument about morality and what obligation, if any, wealthy America owes the global poor. The number of Chinese in extreme poverty fell by half from 1980 through 2000, then by another two-thirds after China entered the World Trade Organization in 2001. Since 1980, in other words, more than 700 million Chinese have escaped extreme poverty. And that exodus is due in large part to capitalism in the form of foreign investment and trade. It's a story free marketeers should evangelize at every opportunity. But here's how billionaire businessman Trump sees one of mankind's greatest achievements, via his campaign website:

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

In January 2000, President Bill Clinton boldly promised China's inclusion in the World Trade Organization "is a good deal for America. … Since China joined the WTO, Americans have witnessed the closure of more than 50,000 factories and the loss of tens of millions of jobs. It was not a good deal for America then and it's a bad deal now. It is a typical example of how politicians in Washington have failed our country. [Trump]

There's some truth to Trump's argument about the harm from Chinese trade for some American workers. As China became a global factory floor, Chinese living standards rose sharply. But U.S. labor markets haven't adjusted as quickly as economic models suggested they would. Some regions were hit hard and never recovered. As economists David Autor, David Dorn, and Gordon Hanson write in their recent paper, "The China Shock," workers in sectors affected by trade "experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize."

On the other hand, there have been gains to U.S. welfare — especially to that of lower-income Americans — from cheaper imports. Since poorer families spend a larger share of their income on such goods than wealthier families do, their inflation rate has been lower, and their purchasing power higher. A 2008 study taking this differential into account found it offset the rise in measured income inequality from 1994 through 2005.

But set those potential consumer gains aside for a moment. Even knowing what we now know about the possible impact on U.S. jobs, should Washington have somehow limited trade and overseas investment with China — even at the cost of higher global poverty? Certainly the humanitarian answer is "No." What's more, I'm not sure what set of plausible public policies could have significantly offset the one-time economic shock to advanced economies of hundreds of millions of low-wage workers fully entering the global trading system. There's also a longer-term economic benefit to the U.S. and the rest of the world from poor people getting richer, healthier, more educated, and adding their brainpower to the global intellectual stock for new invention and innovation. Yet while we should take into account the well-being of non-U.S. citizens, American workers can't be left to fend for themselves. Clearly we've long needed a stronger, pro-work safety net that helps the "losers" from trade through a variety of means including effective retraining, wage subsidies, and relocation assistance. While trade isn't the zero-sum game Trump seemingly imagines, there are trade-offs.

Perhaps this is overthinking Trumpism. At last weekend's Republican presidential debate, Trump criticized air-conditioner maker Carrier for plans to move a plant and 1,400 jobs to Mexico from Indianapolis. He also didn't like the idea of Chinese investors buying the 134-year-old Chicago Stock Exchange, the first-ever purchase of an American exchange by a Chinese company. So Americans shouldn't invest in other nations, and neither should they invest in us? Taken at face value, what Trump's really arguing for is not "free trade" or "fair trade" —but no trade at all.

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
James Pethokoukis

James Pethokoukis is the DeWitt Wallace Fellow at the American Enterprise Institute where he runs the AEIdeas blog. He has also written for The New York Times, National Review, Commentary, The Weekly Standard, and other places.