Articles, Letters April 11, 2018

Trade dispute likely to harm not help the US

by Kai L. Chan

Letter to the Financial Times (April 11, 2018)

From Kai L. Chan, Montreal, Canada

Sir, Standing up for American interests and actually improving the lives of Americans are different things. The heterodox economics espoused by Peter Navarro (Opinion, April 9) are reminiscent of the mercantilism that held sway in the 16th century.

The “help” that Mr Navarro and Donald Trump are pushing forth in the trade dispute with China are more likely than not to be welfare decreasing for the whole world. A similar kind of help, likewise from another Asian rival in the 1980s, came when the US government pressured Japan to impose voluntary export restraints on their car manufacturers.

That led to unambiguous welfare gains to Japan at the cost of Americans, even as politicians thought they had done a favour for the American people.

Kai L. Chan
Montreal, Canada

Copyright The Financial Times Limited 2018. All rights reserved.

Letter as it appeared in the FT.