Open and competitive markets have helped make the United States a truly great nation – vibrant, prosperous, and the envy of much of the world. To be genuinely free, people must have the ability to buy from and sell to whomever they wish. The Constitution prohibits restrictions on trade between states, which has led to highly efficient use of resources across our large country. Stand Together supports expanding the benefits of free trade beyond our borders. This means pursuing the elimination of trade barriers worldwide, including those imposed by the U.S. government. The only legitimate justification for restricting trade is in instances in which exports or imports would create a serious threat to national security.
The United States should face the challenges of the 21st century with confidence that the keys to its past successes also are the keys to the future. This means maintaining a favorable business climate based on economic freedom, entrepreneurship, and robust competition undergirded by the rule of law. It also means fostering an economy that encourages education, research and development, investment, and innovation. And it means avoiding self-imposed obstacles, such as policies that stifle commercial opportunity or restrict trade.
We want to open the U.S. economy to the rest of the world so that every American can experience greater prosperity.
Our vision in action
- Stand Together’s Trade Priority Initiative is applying those principles in four areas: Having the right approach to economic engagement with China; opposing efforts to implement national industrial policies in the United States; promoting trade liberalization through the mechanism of ideal free trade agreements, especially FTAs with select countries like the UK; and supporting a rebalance of power between the executive and legislative branches so that Congress must approve presidential tariff increases.
- Americans for Prosperity is taking its message across the country with its Trade Builds America campaign, highlighting how local businesses and citizens are impacted by trade and the policies Washington imposes. According to Jamie Baisden, president of Wind River Chimes (formerly QMT Wind Chimes), “trade helps us be an integral part of creating a robust and resilient community.”
- Veronique de Rugy of the Mercatus Center at George Mason University explains the benefits of trade on national TV and in major newspapers.
Trade has been a key ingredient to increasing Americans’ standards of living by as much as 3,000% over the last two centuries. In just 50 years following World War II, it benefited the typical American family by around $10,000 annually.
Guiding principles and insights
Imports make Americans prosperous
The evidence is clear: more trade means more prosperity for more Americans over the long term. A recent study found that for every percentage point increase in the share of the economy based on trade, the economy grows twice as fast. The benefits to Americans are immense. By the early 2000s, the typical American family benefited by around $10,000 thanks to the move by countries around the globe to begin reducing trade barriers after World War II.
Yet these benefits are often ignored in the current debate over trade. In fact, today’s debate often gets things completely backward, particularly the argument that trade deficits with other countries are harmful.
In the simplest of terms, a trade deficit means Americans have chosen to buy more stuff they value. Think about it. You run a trade deficit with your grocer: you buy food from them, but they don’t buy anything from you. And yet, you’re both better for it. This reality helps to explain why our trade deficit with China is much larger today—when our economy is strong and unemployment is near historic lows—than during the Great Recession.
Many Americans understandably worry increasing trade is displacing jobs. Displacement is real, but 85 percent of lost jobs are due to the rapid pace of innovation and technological change that will continue to accelerate. Blocking trade won’t help these workers and their families. It highlights the need to do everything we can to help more people acquire the values and skills to compete in an evolving world. It’s part of the reason we support more than 30 workforce development programs nationwide and invest in cutting-edge educational programs.
“Tariffs to us really are a tax. Our ability to be profitable is greatly decreased with tariffs. Trade is an important part of our business.” – Family Farm Owner.
Protectionism doesn’t “protect” the United States—at all
Competition is the key to innovation, and both increase with more trade to the benefit of the U.S. as a whole. For example, a 2015 study found innovation was higher among firms that were more exposed to Chinese imports than those that weren’t. Another study found the U.S. is 50 percent more prosperous than if we were closed to trade.
On the other hand, protectionist policies that limit competition also limit innovation, harming everyone—including those they are intended to help—in the process.
Tariffs are a case in point. Tariffs are sales taxes paid by the citizens of the country that imposes them. So when the U.S. slaps tariffs on imported steel, it increases costs for U.S. manufacturers that use steel to make cars, nails, machinery, and countless other products, while raising prices on consumers who buy these and other every day goods. When the U.S. imposed steel tariffs in the early 2000s, they actually destroyed more jobs than the tariffs were designed to protect.
Protectionist policies also harm the very industries they’re designed to protect by providing less incentive to continue innovating over time. For example, even though the U.S. steel industry was “protected” by 150 different provisions during the 1990s and 2000s, it is dramatically smaller today in terms of both employment and investment, with many firms declaring bankruptcy.
Protectionism doesn’t protect the U.S. at all. Tariffs, quotas, and other protectionist policies harm every American over the long term, while competition and innovation driven by trade benefit us all.
The U.S. wins 87 percent of complaints it files with the World Trade Organization against other countries’ improper trade practices—a far more effective method for resolving disputes that help the U.S. without harming American workers.
Better ways to negotiate than taking yourself hostage
Critics of trade express valid concerns, particularly when it comes to China allowing—and in some cases, directly conducting—the theft of intellectual property from U.S. businesses.
That said, launching a “trade war” is akin to taking yourself hostage. Considering tariffs are a sales tax paid by the imposing country’s citizens, a trade war is effectively two countries harming their own people until the other relents. A study found that in 2019, the current trade policies could cost 2.75 million U.S. jobs, among other disastrous consequences.
What should we do instead? History is instructive on this point: Just stop it already.
Places like Hong Kong and Singapore have shown unilaterally eliminating barriers to trade produces enormous benefits for their citizens. Even if other countries stick to their own protectionist policies, Americans would still benefit from eliminating all of ours. We should pursue multilateral and bilateral trade agreements like the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and others that have increased standards of living for all Americans while also providing effective channels for resolving disputes.
More examples of the work supported by the Stand Together community:
- The Mercatus Center at George Mason University is recognized as one of the country’s leading authorities on the benefits of trade and the harms of protectionist policies.
- Supporting dozens of workforce development programs across the country that are helping the unemployed and people whose jobs have been displaced acquire the skills to find employment in new, innovative fields.
- Uniting a coalition of more than 50 businesses, trade associations, and others in the business community to take a principled stand against recent tariffs and provide a more accurate narrative about the benefits of trade.
- Launched a multiyear, multimillion-dollar media and communications campaign—including national TV, digital ads, and direct mail into lawmakers’ districts—that demonstrate the harms of recent tariffs and show the benefits of increasing trade.
- Unite policymakers and citizen activists to defeat protectionist policies such as the border-adjustment tax that was proposed as part of the 2017 tax reform plan ,which would have raised prices on everyday goods purchased by American families.
- Support policy champions at all levels of government who will enact policies that increase trade and reduce protectionist policies.
It’s a natural—but ultimately destructive—tendency to respond to the increasing pace of change and innovation by erecting protectionist policies that try to hold on to the past. We should embrace the future and increase trade with other countries, not close ourselves off to the world.