A ruthless U.S. trade offensiveU.S. economists have raised their voices against the reckless, harmful trade protectionism under President Donald Trump. In an opinion piece on the New York Times, Harvard University’s Greg Mankiw said that the series of anti-foreign and import policy was against basic economic theory and logic.
Free trade was a major theme in Adam Smith’s 18th-century economics bible “An Inquiry into Nature and Causes of the Wealth of Nations.” As people find employment doing what they do best and rely on others doing what they do best, nations also should specialize in producing their specialties and freely trade to meet consumer needs, he said.
Prof. Mankiw cited a 19th-century theory on comparative advantage by David Ricardo to explain how trade is mutually beneficial. For instance, tennis champion Roger Federer may mow his lawn faster than anyone else given his athletic prowess, but it would be to his advantage and others to use his power on the court rather than on mowing. Trade restrictions interfere with markets and hurt growth, he warned.
The U.S. mainstream media joined the chorus of criticism against Trump’s nationalist trade policy. The Washington Post observed with disdain how Washington can pick a trade war with one of its major allies at a time when it is struggling to cope with nuclear-armed North Korea. The Wall Street Journal also warned of a backlash from harsh sanctions on steel imports as there are much more workers and jobs involved in steel-consuming industries than the steel-making industry in the United States. Steep tariffs can benefit U.S. employment temporarily, but will eventually hurt consumption, it argued.
So, how ready is the Moon Jae-in administration for a battle against Washington’s ruthless trade offensive? The trade negotiating division in the trade ministry cannot even install an assistant ministerial post in charge with designing its commerce strategy against this new trade environment. We can hardly expect “bold and confident” trade policies President Moon has demanded from the ministry when the government cannot even appoint a head for the negotiating division.
JoongAng Ilbo, Feb. 23, Page 30