6/7/2018 Protectionism (1)
Protectionism (1) President Trump’s trade policy is likely to exert a dangerous influence on international trade. Although I disagree with his protectionism, I do not think the principle of free trade is desirable to humankind. It has two serious defects. The first is that it assumes all production plans can be adjusted without costs. It claims that if country A’s wine production has become competitively weaker than country B’s, country A should produce something else. Such a change of production plan incurs enormous costs which are ignored by that principle. The second defect is that it ignores national security. International trade can be and actually has been used to threaten foreign countries or put them in a subordinate position by suggesting restriction of export of indispensable products. USA invoked oil and iron embargoes against Japan to induce the ‘Pacific War.’ It has used trade quite strategically. China invoked rare metal embargoes a few years ago. A