Trump on trade: make free riders pay

“They are selling us their BMWs and TVs and oil and we are giving them security – for free. Either we slap a tariff on their goods or they start paying their fair share for joint defense.”

Surprisingly, this was Donald Trump’s view in 1990 and remains his view in 2016.

The claim that the Europeans are not bearing their share of the burden has since gone mainstream. The solutions offered by American politicians are limited to the obvious: joint military operations and anti-terrorist efforts. But they do not see it as a matter of international trade and division of labor, and do not ask themselves whether the least wasteful solution would be for the US to keep acting as the world’s policeman, although for better pay.

Some people are deliberately looking the other way and not paying attention, but Trump’s agenda is not a contradiction in terms and its non-negotiable parts are easily discernible with a modicum of effort. Two of its pillars are restricting immigration from the third world and doing something to reverse the damage to unprivileged American classes from policies masquerading as free trade. There is probably a third: a foreign policy rooted in national interest rather than democracy promotion and such. This third leg seems either vaguely defined or underdeveloped but it’s connected to the second – trade – in an interesting way.

Trump, it turns out, has consistently argued since at least 1990 that the terms of trade between the United States and its allies unfairly favor the latter because the US subsidizes them to a vast extent by providing for free a crucial public good: regional and global security. You can find this argument as well as the suggestion that imports from these countries be taxed to recover some of that subsidy or make the exporters contribute more to joint security, in the 1990 Playboy interview. Trump has taken lots of flak for these ideas lately but one should not accuse him of flip-flopping on them.


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