Both party leaders agree that reducing globalization is necessary.
“China is taking advantage of us in trade,” says Donald Trump.
Nancy Pelosi calls our trade deficit “an immorality.”
However, in a new video, Scott Lincicome from the Cato Institute explains, “Selling us goods is not ripping us off.”
He’s correct.
Our video addresses common misconceptions about trade.
Myth #1: America is “losing.”
People often believe this due to the trade deficit, but trade doesn’t always need to be balanced. Just like I have a trade deficit with my supermarket, where they receive more of my money each year. It’s a win-win situation for both parties involved.
“Imports are beneficial,” says Lincicome. “It allows me to focus on my work and not worry about producing my own essentials.”
As long as trade is voluntary, it benefits both sides.
Myth #2: Imports result in job loss for Americans.
While some jobs may be lost, trade is not the primary reason. Job losses often occur due to changing consumer preferences and innovation, leading to increased productivity.
Trade and productivity enhancements have actually led to a rise in the number of employed Americans.
Myth #3: American manufacturing is declining.
In reality, manufacturing output in the U.S. is close to its peak and surpasses other major manufacturing countries combined.
Myth #4: Trade and open markets lead to a “race to the bottom.”
While companies may search for cheap labor, trade helps individuals in poor countries move away from subsistence farming and other undesirable work options.
Myth #5: Globalization harms the environment.
As countries become wealthier, they tend to focus more on environmental concerns, leading to a decrease in pollution levels.
Trade is a mutually beneficial arrangement that provides us with more goods at lower prices, making us better off.
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