An Economic Policy That’s Just a Little Bit Radical

Hey, politician. Yeah, you.

Want to give Americans a modest tax cut, raise the standard of living for middle-class and lower-income families, reduce federal bureaucracy, and make U.S. companies more competitive in the global marketplace? 

Easy—all you have to do is enact the single most unpopular idea in American politics: unilateral free trade. 

Unilateral free trade is a policy under which non-U.S. companies can sell their goods and services in the United States under the same terms U.S. firms do. All of the usual things that apply to U.S. products would apply, from health-and-safety standards for automobiles to FDA approval for imported pharmaceuticals. Those things already apply to all goods sold in the United States, of whatever origin, and still would. What wouldn’t apply would be tariffs, import duties, quotas, and other trade restrictions. The rule would be that if John Smith of Houston can legally sell it in the United States, then John Smith of London can, too, along with Johan Schmidt of Düsseldorf, Jean Forgeron of Marseille, Juan Herrera of Mexico City, Jan Kowalstwo of Warsaw, etc. 

Put another way: Americans would be free to buy whatever they damn well please from whomever they damn well please, from wherever in the world, without any special permission from the ladies and gentlemen in Washington. 

You know: freedom. More choices. More competition. 

I myself have been working in a unilateral free-trade environment for most of my life—if you get tired of reading me and want to read, say, Daniel Hannan in the Telegraph, K J Singh in the Indian Express, or any of another three dozen terrific and interesting writers I could name, there isn’t anything stopping you. The digital content industry operates in what’s about as close to a perfectly free global marketplace as the world is likely ever to see—and it’s great. For producers, it is easy to connect with widely dispersed consumers, meaning that even niche, non-mass-market creators can be economically viable; for consumers, it is wonderful to have so many choices from so many providers around the world. 

Everybody loves free trade in content. If the U.S. government told Americans that they had to pay $5 every time they watched a YouTube video made in a foreign country or clicked on an article in the Times of London, we would throw a fit. If some government functionary told Americans that we couldn’t watch Broadchurch because we have hit our national quota of imported British crime shows, we’d riot. 

We’ll fight for our right to binge-watch depressing Scandinavian murder mysteries, but we’re going to let Uncle Stupid tell us that we can’t buy medicine from some hygiene-obsessed Danish outfit without begging Washington for the privilege? 

About that, here’s a free-trade success story: Americans love the weight-loss drug Ozempic. Can’t get enough of the stuff—literally, Novo Nordisk has the assembly lines running 24/7, and they can’t keep up with demand, almost all of which is here in the United States. Not because Americans are the only people who need it, but because we are such a lucrative market that we go to the top of the list. And file away this interesting little nugget: Sales of Novo Nordisk’s drugs accounts for almost all of Denmark’s economic growth in 2023. Novo Nordisk by itself paid 15 percent of all corporate taxes in the country. So a bunch of Danish bank accounts are getting fat off of Americans trying to get skinny. Question: Do you feel victimized by that? Should anybody? No. It’s a classic win-win: The Danes get gently depreciating U.S. dollars, we get rapidly dis-inflating American asses. 

Politicians talk about “fair trade.” The term is meaningless. What they mean by fairness is that other countries offer our exports the same terms we offer their imports. And those countries that haven’t opened up their markets would be wise to do so. Free trade would be better for everybody. But why would we want to adopt the stupid and frequently corrupt trade policies of badly governed countries just because some of our people do business with some of their people? Why on Earth would the United States want to adopt Chinese trade policy, or Russian trade policy, or even European Union trade policy, for that matter? We don’t impose Scandinavian levels of taxation on Americans; we don’t impose Euro-Canadian-style speech-police rules on Americans; we don’t impose Japanese-style gun laws on Americans. We trust Americans to handle freedom of speech and to own their own guns—and some Americans are determined to try to screw those up for everybody!—but somehow we can’t trust U.S.-based builders to decide whether to frame houses out of U.S.-sourced lumber or Canadian-sourced lumber? 

Nonsense. 

Yes, unilateral free trade would hurt some firms exposed to more direct foreign competition. I’d probably make more money, too, if U.S. readers were restricted to U.S. sources—life’s tough out here in the free market. Get a helmet. I’m sure our captains of industry will figure it out. 

There will be some skinned knees. But keep in mind that trade restriction isn’t cost-free, either: Those dumb tariffs that Donald Trump wants to impose would hurt everybody, not only consumers of finished goods but also manufacturers of goods who import material and components—who currently pay artificially high prices for many inputs thanks to trade restrictions. And it costs money to administer those trade restrictions, too. Quota-enforcement alone involves the efforts of at least five federal agencies: Customs, Treasury, Interior, Commerce, and the ever-lovin’ U.S. Department of Agriculture, whose agents spend their days producing rules for, e.g., “Dried Milk, Dried Cream, Dried Whey (up to 224,981 kilograms) (Chapter 4, Additional U.S. Note 12) . . . Cheese and Substitutes for Cheese (Chapter 4, Additional U.S. Note 23).”

Sure, you can make carveouts for sensitive defense and intelligence goods, and you may want to prohibit some other goods (like those shady Chinese cell-tower arrays) on a case-by-case basis. Fine. Those aren’t really economic decisions in that they aren’t mainly a matter of economic policy. But the rule and the presumption in economic policy should be in favor of Americans’ right to do business with whom they please on whatever terms they like. 

(Sen. Marco Rubio and his deeply silly “national security” case for enriching his local sugar barons notwithstanding.)

I can hear what’s coming next. It’s always the same, and I got into it some in Monday’s newsletter: Don’t let anybody buffalo you into believing that we’ve “hollowed out” our industrial base. U.S. industrial output today is more than twice what it was in the 1980s and nearly five times what it was in the 1950s, the supposed heyday of U.S. factory work. We’ve done that not in spite of the fact that we’ve freed up the economy since the immediate postwar years but because we’ve freed up the economy. We have a huge domestic market and an even bigger North American bloc, the best workers, ports facing the two oceans that matter most, and the world’s most sophisticated markets for financing all those factories, lines of production, and product development. 

The notion that we cannot compete with China—a country that remains significantly poorer than Mexico and poorer than Kazakhstan, for that matter—is horsepucky. Yes, some overseas governments will subsidize politically connected domestic firms in the backwaters of wherever: If some foreign potentates want to artificially lower the standard of living for their people while subsidizing ours—which is what that amounts to—then it’s both corrupt and stupid, and it isn’t even the most efficient way to artificially enrich your cronies, either, but it’s no skin off our national nose. 

So, there’s your policy: Keep the food-and-drug inspections, send the quota-monkeys and the tariff-collectors home. Nobody is going to miss them. And, then, welcome abundance as the world’s producers bring their best produce to our doorstep. 

All we have to do is say, “Yes.”