Free Trade vs. Protectionism
America was founded on the policy of protection for American industries. The first bill of our new congress, after approval of the presidential seal of the United States, was a tariff on various imported items. Our founding fathers from George Washington to Abraham Lincoln and Theodore Roosevelt were all protectionists, and found no negative relationship between high tariffs and economic growth. For the United States, free trade equaled failure while protectionism equaled prosperity.
We see the same evidence today. The United States practices free trade with a protectionist China and we run a huge trade deficit with China. China’s annual economic growth hovers around 10% while America’s economic growth languishes between 3% and 4%. China can’t figure out what to do with its trillion dollars of reserves while the United States can’t figure out what to do with its nine trillion dollar debt.
