Wednesday, May 23, 2018

Is the United States Taking Unfair Advantage of Hong Kong?

A Don Boudreaux open letter to the President:
22 May 2018
Mr. Donald Trump
1600 Pennsylvania Ave., NW
Washington, DC 20500
Mr. Trump:
You and your trade triumvirate regularly insist that China’s trade surplus with the U.S. reveals that China is taking unfair advantage of America and thereby damaging our economy. So tell me, is America taking unfair advantage of Hong Kong, the Netherlands, Australia, the United Kingdom, Guatemala, and the several other countries with which the U.S. is now running trade surpluses? Are we Americans abusing the citizens of these countries and damaging their economies by selling more goods to each of them than each of them sells to us? (And do note that some of these trade surpluses that the U.S. has with other countries are larger, as a percentage of those countries’ GDPs, than is the Chinese trade surplus with America. As of March 2018, for example, the year-to-date U.S. trade surplus with the Netherlands is 0.81 percent of Dutch GDP, while China’s trade surplus with the U.S. over that same period is only 0.47 percent of U.S. GDP.)
Given your repeated demands that justice requires that Beijing take steps to reduce China’s trade surplus with America by arranging for us Americans to sell more to the people of China without the people of China selling more to us, will you and your administration take steps to reduce America’s trade surpluses with the U.K., and with the many other countries with which we have a trade surplus, by arranging for the citizens of those countries to sell more to us Americans without us Americans selling more to them?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

The above originally appeared at Cafe Hayek.

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