January 19, 2016
By Tim Worstall
I will admit to rather enjoying the sight of Donald Trump storming through the Republican race. It’s simply refreshing to see someone over turning the established and perhaps too measured way that politics has been approached recently. However, my enjoyment is as nothing to the perils of the economic policy which he’s just announced, which is that he’ll get Apple to start making “their damn computers” in America instead of in other countries. This is really not a sensible policy at all even though it accords with his other misunderstandings about trade. Because the net effect of such a policy would be to make America a poorer country. Something we’ve known since David Ricardo published in 1817. And, since making the country, or the people of the country, poorer is not at all the point nor purpose of having an economy, or even a public policy about the economy, this is something we really shouldn’t try to do.
The comment itself is here:
“We’re going to get Apple to build their damn computers in this country instead of other countries.”
An all-American Apple sure sounds nice—it would create jobs, it would help ensure that the factory workers have decent working conditions. It’s also an empty applause line. The US president does not have the power to ban a company from outsourcing, nor does the president have the power to completely overhaul the global economy.
It’s part and parcel of his misunderstanding about trade:
During his 45-minute speech on Martin Luther King day, Trump also claimed to support free trade yet insisted he’d impose a 35 percent tax on businesses producing goods overseas, including Ford cars that are produced in Mexico.
CNET reports that the GOP candidate and billionaire businessman said American companies should not be free to manufacture wherever they choose.
“Free trade is good. But we have to do it [force them back to the US]. Or we won’t have a country left,” said Trump.