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Trump's Trade War Destroys Liberty and Prosperity

• Jacob Hornberger

President Trump announced this week that America is "winning" the trade war that he initiated against China. The truth is that Trump is not only destroying businesses in both China and the United States, he is accelerating the destruction of American liberty.

Trump crowed, "We've taken in tens of billions of dollars in tariffs from China." Well, that might well be something for the federal government to celebrate, but why should the American people, who are paying these taxes, be celebrating?

Of course, like any other standard conservative, Trump conflates the federal government and the American populace. For him and his fellow conservatives, they are one and the same thing. So, in his conservative mind, when the federal government plunders and loots the American people through higher taxes, "we" are winning because, in the conservative mind, "we" is one conflated entity consisting of the federal government and the country.

Actually though, the federal government and the American people (i.e., "the country") are two separate and distinct entities, a phenomenon reflected in the Bill of Rights, which expressly protects the American people (and foreigners) from the federal government.

One of the keys to a rising standard of living across society is increased productivity. More productivity means a higher standard of living. How do people become more productive? Through better tools and equipment — i.e., through productive capital. How do businesses get more capital? Through increased savings among the populace. The more that people save, the more capital comes into existence, which means increased productivity, which means higher wages and increased standards of living.

Thus, the more wealth that the government sucks out of the private sector through taxes, the worse off people are because it means less savings, less capital, less productivity, and reduced standards of living.

That's why Trump's belief that "we" are winning his trade war is so perverse. In the conservative mind, the more that the federal government collects in taxes, the more the American people are supposed to cheer.

In every trade, both sides benefit. That's because at the moment of the trade, both sides are giving up something they value less for something they value more. Thus, standards of living rise through the simple act of trade. It stands to reason that the greater the opportunities for trade, the better off people are.

Thus, Trump's "winning" mindset is doubly weird. Not only does he think that a higher taxes collected from the American people proves that they are "winning," he thinks that destroying opportunities for trade also shows that they are "winning."

Realizing that he's got a presidential election coming up next year and that his Democratic opponents are offering voters an array of free political candy to get their votes, Trump is not about to stand by without offering voters his own candy. Thus, to compensate farmers whose business has been destroyed by his trade war, Trump is sending them billions of dollars in federal welfare.

The New York Times reports that Trump's farm welfare totals $28 billion, while the federal government is collecting $20.8 billion in tariff revenue from American consumers. So, Trump bankrupts American farmers with his trade war, collects tariffs in the process, which he then uses to put those farmers on welfare. And then to make up the $8 billion shortfall, he has to tax the American people even more. And those figures don't even account for all the American businesses that have been financially damaged or destroyed by Trump's trade war and who don't have the political clout to receive Trump's free political candy. And he says "we" are "winning."

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