Heaven knows how Andrew Romanoff survives the stress of a trip to Target. “Because of lax standards abroad and inadequate inspection at home,” the Democratic candidate for U.S. Senate declared last week, “many of the products we are importing are dangerous or even deadly.”
Many of them? As a fraction of the entire array of imported products, the dangerous or deadly ones surely comprise a tiny sliver. If a significant percentage of imports were truly dangerous, this country would have locked down its borders to international trade years ago — as Romanoff apparently is inclined to do today. His Getting America’s Trade Policy Back on Track program is protectionism on steroids.
Maybe Coloradans are so rocked by unemployment, recession and resentment of China that they’re ready for Congress to impose high tariffs on imported goods from countries “that undervalue their currency, violate labor laws, abuse human rights, and degrade the environment,” to quote Romanoff’s statement on trade, in order to save jobs. But if the former speaker of the state House wishes to waltz down that perilous path — the tariff of 1930 didn’t exactly do wonders for job creation — he might at least spare us the caricature of imports.
If foreign goods were as generally awful as he suggests, they wouldn’t be selling in the first place and we wouldn’t have a trade deficit for Senate candidates to grouse about.
Romanoff is of course on firmer ground in complaining that China keeps the value of its currency artificially low “to make its products cheaper” on international markets. You can even find a few experts — economist and columnist Paul Krugman, for example — who agree with him that we should slap “countervailing duties” on China’s goods until it comes around.
Meanwhile, however, you can find many experts alarmed at the possible damage that such a blunt instrument could inflict on worldwide trade and who warn against expecting too much anyway from a revalued Chinese yuan. “As China appears likely to move its currency off a strict peg to the U.S. dollar,” The Wall Street Journal reported Monday, “there is a growing consensus among economists that such a shift will neither rescue America’s manufacturing sector nor devastate China . . . . J.P. Morgan economists estimate that a 10 percent trade-weighted appreciation in the yuan would reduce China’s overall exports by only 2 percent.”
Is that pipsqueak percentage — or even two or three times that amount — really worth the possibility of a trade war? Especially considering that “China’s overall trade surplus nearly tripled” during the last round of its currency appreciation even though the “yuan rose 21 percent against the U.S. dollar.”
Romanoff’s position on trade so stacks the deck against China that he’ll still have room to call for tariffs no matter what that country does with its currency. Nor need he stop with duties on Chinese goods. If Romanoff is to be believed and American workers shouldn’t have to compete with countries that “degrade the environment” — by building coal plants, for example, to produce the electricity their impoverished citizens so desperately need — then we can pretty much rule out free trade with India, Bangladesh and a host of other nations, too.
I’m no more of an economist than Romanoff, but you don’t have to be one to recognize that flirting with protectionism is a high-wire act — sans safety net. It’s hard to find consensus among economists on anything, but they’re pretty close to general agreement on the idea that free trade is beneficial to all participants. It is one thing for a politician to worry about an undervalued currency. It’s quite another to define “fair trade,” as Romanoff does, in a way that gives aid and comfort to those who would launch a full-blown crackdown on imports.
“Thirty-five years ago,” Romanoff informs us, “the United States exported more goods and services than we imported.”
Thirty-five years ago would be 1975. Now there was a period of economic bliss.
E-mail Vincent Carroll at vcarroll@denverpost.com.
