Understanding and Unwinding Our Trade War with China

What do felt hats, flamethrowers, soybeans, and aluminum all have in common? They're all potential targets for new tariffs in the escalating trade dispute between the United States and China.

For some time, the US has been trending towards freer and more open trade, culminating with the North American Free Trade Agreement and efforts to finalize the Trans‑Pacific Partnership. But that trend may have come to an abrupt halt under an administration that has famously said, "Trade wars are good and easy to win."

Here to explain whether or not we're in a trade war already, what that means for the US and China, and what US policymakers should do going forward, are three experts in the field:

• Caroline Baum, regular contributor to MarketWatch
• Dan Griswold, and Don Boudreaux, co-directors of the Mercatus Center's Program on the American Economy and Globalization

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Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected].

REESE: Welcome to the Mercatus Center Policy Download, I'm your host, Chad Reese.

What do felt hats, flamethrowers, soybeans, and aluminum all have in common? They're all potential targets for new tariffs in the slowly escalating trade dispute between the United States and China.

For some time, the US has been trending towards freer and more open trade, culminating the North American Free Trade Agreement and efforts to finalize the Trans‑Pacific Partnership. But that trend may have come to an abrupt halt under an administration that has famously said, "Trade wars are good and easy to win."

Here to explain whether or not we're in a trade war already, what that means for the US and China, and what US policy makers should do going forward, are three experts in the field.

First up, we're joined by Caroline Baum, freelance journalist who contributes regularly to Market Watch. Thanks for joining us, Caroline.

BAUM: Pleasure to be here.

REESE: We also have both co‑directors from the Mercatus Center's Program on the American Economy and Globalization, first, Dan Griswold, welcome.

GRISWOLD: Glad to be here.

REESE: And Don Boudreaux. Glad you could join us this afternoon.

BOUDREAUX: Happy to be here, Chad.

REESE: I want to tee up the conversation because the timeline and sequence of events here are really important to understand what's going on. Can one of you give me a 30 second overview of why people are Googling "trade war" more than any time since Google started keeping track of their searches?

GRISWOLD: Chad, I think the fuse got lit last year when the Trump administration started to investigate steel imports under a little used feature of the law called Section 232. That gives a president the power to restrict imports that threaten national security.

The Commerce Department under Wilbur Ross came out with a report. In the president's hands, he decided to impose duties on imported steel. Nobody who has any knowledge of national defense thinks it was a legitimate report. Even the Defense Department said, "Don't do these broad tariffs. Make them more focused."

China was one of the targets, even though they're the number 11 source of imported steel. The Chinese have retaliated in kind. We put tariffs on about $3 billion worth of Chinese steel imports. They recently announced tariffs on $3 billion worth of US exports to China.

Then, raising it an exponential level, the Trump administration has a parallel investigation called Section 301. That's broad based. You can use it against any country that's engaged in "unfair trade practices." The Trump administration targeted Chinese treatment of intellectual property.

They announced tariffs of $50 billion against imports from China. China immediately ‑‑ I think it was basically within the same 24 hour news cycle ‑‑ announced tariffs against $50 billion worth of US exports to China.

I think this is a classic trade war, escalating tit for tat tariffs that, while they're aimed at the other country, they do just as much damage to the country imposing them. That's where we got where we're at.

BOUDREAUX: I almost never disagree with my colleague Dan, but I would disagree with him a little bit there. I don't think there's an equivalence between the damage. I think most of the damage is done to the people in the country whose governments are imposing them.

It's true that US tariffs on Americans who buy Chinese steel inflict some harm on the Chinese, but the main focus of the damage, really, I know Dan does agree with this, actually...The main people who incur that damage are Americans. The main people who incur the damage of the Chinese tariffs are innocent Chinese citizens.

The thing about trade wars is that they're wars where governments inflict damage on their own citizens in the hope of persuading the other government to stop inflicting damage on its citizens. It's a very bizarre war.

BAUM: It's the one thing that Trump has, the one policy position that he has been adamant about since the 1980s, that trade is a zero sum game, that we are losers, that countries take advantage of us. It seems to be, by hook or by crook, even though he doesn't understand that the other side of the trade deficit is the capital inflow, that he is going to have his way.

BOUDREAUX: That's a great point, Caroline. He has been consistent. In some ways, that's a positive thing. At least there's something he really believes in and he's following through.

GRISWOLD: A man of principle.

BOUDREAUX: On the other hand, it means he's probably less likely to be dissuaded. He's held these questionable beliefs for 30 years. Unfortunately, he has surrounded himself with advisors that are feeding his misinformed view of trade relations. Peter Navarro...

BAUM: Isn't he going to be disappointed, given that the budget deficit is likely to blow up to, according to estimates, a trillion dollars in 2019? There is some connection between the twin deficits.

BOUDREAUX: Yes. Caroline, this administration is full of ironies when it comes to trade. One of the big ironies is at the same time that they welcome foreign investment into the United States and they're driving up the federal debt, which attracts foreign funds to buy Treasury bonds, they complain about the trade deficit.

GRISWOLD: It is definitely full of ironies.

REESE: Caroline teed us up, talking about twin deficits here. I want to make sure we're addressing this, because trade deficits have really been at least the rhetorical heart of the escalating trade conflict. We have a trade deficit with China, it sounds like. Is that not a bad thing? It sounds like a bad thing to me.

GRISWOLD: There is no concept in all of economics, and certainly no concept in the area of trade, that produces more confusion and more policy mischief than the so‑called balance of payments, of which the trade deficit is a part.

The trade deficit is, in my view, a nearly meaningless figure. Certainly, the term "deficit" does not, in fact, mean what it means when we're talking about government budget deficits. When the government runs a budget deficit, the government, and hence the taxpayers do in fact go further into debt.

When Americans run a trade deficit, contrary to what people believe, it is not the case that Americans necessarily go further into debt. This belief that they do go further into debt because the name sounds that way helps demagogues perpetuate really bad trade policies, restrictionist trade policies.

BOUDREAUX: A couple things about our trade accounts. First, virtually every dollar that flows out of the United States to, say, buy imports flows back. If it buys our exports, we've got balanced trade. So‑called balanced trade in goods or whatever.

If it comes back to buy a US asset, that's not bad. It means investing in a automobile factory in Tennessee or South Carolina.

It means buying a Treasury bond, which I don't think government debt is a good thing, but if they're going to go into debt, foreigners parking their savings here means that there's more savings left over here in the US economy to invest domestically. It's less crowding out and keeps long term interest rates down. That's good.

BAUM: I think China is the largest foreign holder of US Treasuries. It's over a trillion dollars.

BOUDREAUX: Right up there with Japan. They both have about a trillion. You are correct.

BAUM: I know I read something the other day about the bond market isn't reacting. It looks like the threat this time is not, "We're going to dump our Treasuries," because they have dollars from the goods we buy from them.

I had a question for Don and Dan, only because I hear this in general conversation. I'm talking about not people who were in the policy world or the economics or journalism world. They say to me, "I know tariffs are bad, but China doesn't play by the rules."

What would be a better way to address all this?

GRISWOLD: China, no doubt, like most other governments, like all other governments, subsidises some of its producers. It imposes import restrictions against imports from other countries. Every country does that, including, by the way, the United States.

What free trade means, the very concept of free trade, is that a government leaves its own citizens alone and lets their citizens spend their money and invest their money as they choose. The fact that the Chinese government or the German government or the Swiss government...Actually, the Swiss government doesn't. You name the government.

Abuses its citizens with import restrictions and taxes used to fund special interest subsidies does not mean that therefore we should do the same in turn. The rules that the Chinese government breaks when it does this are rules against the proper treatment of its own people.

We are not so much harmed by those violations. The Chinese people are harmed by those violations.

BAUM: Good point.

GRISWOLD: When we retaliate, so‑called, we Americans are harmed by our government's retaliation, not so much the Chinese.

BOUDREAUX: People have to understand that belonging to the World Trade Organization doesn't mean that every country has the same trade policies and zero tariffs. It wasn't designed that way. What it means is you can basically have your own trade policy. There's 164 members of the WTO. Some of them have high tariffs. Some of them have virtually zero tariffs.

They're all playing by the rules in the sense that they publish what their tariffs are. They keep them under their commitments, the so‑called bound tariffs.

They agree to a very important principle of unconditional Most Favored Nation status. That is if you apply a 10 percent tariff on imported cars from country X, you apply the same 10 percent from country Y. When the US exports to another country, our exporters, they may be facing a tariff, but it's the same tariff that exporters from other countries are facing.

By those rules, China has played by the rules. By the way, when they joined the WTO in 2001, they signed an accession agreement where they committed to lowering their tariffs significantly. We didn't have to agree to any lowering of our tariffs. I wish we did. We have tariffs that need to come down.

The USTR, at least the previous USTR, published reports...

GRISWOLD: US Trade Representative.

BOUDREAUX: US Trade Representative, thank you, Don. When China joined the WTO and after about 10 years of membership, their tariffs on export goods of US interest, in other words, imports to China that are of a particular interest to the United States, dropped from 25 to 7 percent.

Yes, imports from China grew once they joined the WTO, but our exports to China have grown such that they are now our number third market in the world for US exported goods, which comes back to the trade war.

They have a lot to lose if we put tariffs on their goods, as we do as consumers. We have a lot to lose as exporter to China in any trade war.

BAUM: Countries can...China excess steel capacity and dumping. That seems to be a big issue. They subsidize their favored industries. When that happens, WTO members can bring a case before the WTO. The WTO can issue countervailing duties and things like that. Has this been tried with China and its steel?

BOUDREAUX: Yeah, Caroline. You're right, but just a technical note. The WTO doesn't apply any duties, it's the member countries that have the right to impose duties. Again, one of the ironies is we've been pretty aggressive users of these laws.

I could critique the anti‑dumping laws. I think they're unfair in and of themselves because they penalize other countries for doing practices that are perfectly legal in our domestic market, right? Selling in different prices in different markets. Selling at below average total cost, which any business that's losing money is selling at that.

In fact, we...

BAUM: And we benefit, consumers.

BOUDREAUX: Right, by allowing those lower cost goods to come in. It is aimed at goods that are competitively priced.

We have been such aggressive users of anti‑dumping and countervailing duties, especially against China. Half of the outstanding orders are in behalf of the steel industry. That's why steel imports from China were already pretty low before this whole thing started, because we've used these laws.

That's why this notion that we have to put blanket 25 percent tariffs against imported steel because it's being traded unfairly, we have the tools, even though they're abused and they've been used significantly to go after that. It's a phony issue.

BAUM: By all means, let's invite steel and aluminum executives to the White House and give them the option. Do you want permanent tariffs? Do you want [inaudible] quotas?

You talk about crony capitalism of, by, and for the crony capitalists. When they did that a month ago, and Navarro defended it on this...Peter Navarro, the trade advisor, defended it on the Sunday shows. It was laughable.

BOUDREAUX: All in the name of national security. What do those people know about national security? They're defending the bottom line of their corporations by misusing government power.

GRISWOLD: Let's remind people again, what you said earlier, Dan, that China, even before the tariffs, were only number 11 on the export list. It should be pointed out 70 percent of the steel bought and used in America is produced right here in America.

BOUDREAUX: Correct.

GRISWOLD: This national security claim is a complete ruse.

I was looking recently at an old episode of Milton Friedman's great 1980 program, "Free to Choose," the episode where he's discussing trade.

I forget his exact words but Friedman, in his very unique and wonderful way, said, "The minute people start talking about unfair trade," he says, "grab your wallet. That's just an excuse for special interest groups in the home country to impose unjustified restrictions on consumers in the home country in order to help a handful of existing domestic producers."

BAUM: I think the defense industry consumes about three percent of domestic steel. Not only was that a ruse, but shortly after those duties were announced, Trump excused, or what's the word I'm looking for?

BOUDREAUX: Exempted.

GRISWOLD: Exempted.

BAUM: Exempted. Thank you very much. Exempted Mexico, Canada, Australia, stuff like that. He made a sham of the whole thing.

GRISWOLD: On that, I'll point out that my former colleague, the Nobel Prize winning economist Vernon Smith, upon learning of these exemptions wrote on his Facebook...He actually is a very active user of Facebook even though he's in his early 90s.

Wrote on his Facebook page, he said, "The fact that we have these exemptions is proof that the national security claim is a fraud."

REESE: It sounds like none of you all are very convinced by the trade deficit arguments. It sounds like the national security arguments for these tariffs, likewise not very convincing.

The other one that I hear most often, and this goes back to what Caroline mentioned earlier about China not playing by the rules or competing unfairly, has more to do with intellectual property complaints. Does anybody want to address the idea that there are maybe non‑trade components of this?

GRISWOLD: I have an unconventional view of that. I think outright theft, of course, is something that should be addressed, but my understanding, and Dan, you can correct me if I'm wrong.

My understanding is that the typical way the Chinese government handles this is that they put a requirement on American firms that want access to the Chinese market that those firms must reveal certain of their intellectual property.

The companies can choose to do that or not. If they choose not to, they don't get access to the Chinese market. I view it as a tax. The Chinese are imposing an in kind tax on these American companies. I'm not a high tax guy. I'm opposed to taxes but it's a tax, as I see it. Like all taxes, it mostly hurts the citizens of the country imposing the tax.

This tax makes it less attractive for foreign firms to operate in China. In the long run, that redounds to the detriment of the Chinese people.

You can argue about the benefit or detriment of a tax, but I see it as a tax. I wish the Chinese government wouldn't do it, but I think the main people who lose from that are the Chinese people, not us.

BAUM: Don, the tax part is not what US businesses agree to. As you say, it's tax, the cost of doing business. You want access to China, you have to share our intellectual property. Is it not true that, then, these companies, these Chinese companies, then take that, and use that as their own? Is that the theft part of the intellectual property?

GRISWOLD: If American companies voluntarily offer, abide by the regulatory terms that the Beijing government imposes on them, then it's no more theft than is the agreement of any company to abide by whatever regulatory terms the government imposes. I don't like these terms, but I don't think it's theft in the classic sense of the terms.

By the way, if Acme Corporation, some hypothetical American corporation, chooses to reveal its intellectual property to the Chinese in exchange for access to the Chinese market, and then if the Chinese then use that intellectual property or that knowledge to increase their outputs, that makes Americans richer.

We get, the world has more outputs coming from China. Prices are lower, and competition is stronger.

GRISWOLD: I agree with Don. I think appropriation might be a better term than theft.

BAUM: It's bad reporting then, because I've been confused by that.

GRISWOLD: Theft can happen, but I think primarily what people are talking about with this requirement of joint ventures and sharing of technology. It's interesting, we went through something like this with Japan 30 years ago. It's a different country. It's a different country than China. It's an ally.

It's more of a rule of law democracy, but what you find is, countries wake up to the fact that it is in their interest to both protect intellectual property for the sake of foreign investment, but also their domestic companies, they become a more attractive place for foreigners to invest for true innovation to take place.

Appropriating or stealing other countries' technology can only take you so far. If you want to be a truly modern economy, you have to develop your own innovative industries. I think the Chinese are realizing that. We can acknowledge there's a problem here, and it's less than optimal.

Is an all‑out terraform, the way to go about it? I still don't see much of a connection, between the $50 billion worth of imports from China that USTR has targeted for 25 percent tariffs, and the loss of intellectual property, how we're going to somehow get that back through that.

There's no connection, other than a punitive punishment, and I don't think it's going to work with China. I've recommended pursuing cases in the WTO, and let's get together with the European Union, and Japan, and other countries. By the way, let's stop needlessly aggravating them with these needless trade cases on steel and other.

We'd have more friends in the world for these kind of cases, including out NAFTA partners. We can work with the Chinese. The Chinese government has made progress. By the way, I saw a notation just a few days ago in an article. The US Chamber of Commerce has ranked China about in the middle of 50 developing countries, in terms of their treatment of intellectual property.

BOUDREAUX: Oh, wow.

GRISWOLD: They're not the best. they're not the worst. They're the biggest, the problem's bigger than other countries, but they're moving in the right direction, and they're not particularly bad as a developing country. We need to put that in perspective.

BOUDREAUX: Good point.

BAUM: You think China is being, shall I say, strategic, unlike Russia, by targeting soybeans, agricultural exports, Boeing, things like that? Is that a subtle way of having a say in the 2018 midterm?

BOUDREAUX: I don't think it's too subtle.

REESE: Yeah, I don't think.

BOUDREAUX: It's very political.

REESE: Yeah, and in terms of calling it having a say in the midterm, it's what you would expect from any government fighting a trade war. The whole point of these government actions is to change the behavior of the belligerent opponent. The Chinese aren't dumb. They understand that they want to make Trump's core base suffer.

It's going to hurt Trump more than if the trade restrictions from China hurt people in California, because California's not going to vote for Trump anyway.

GRISWOLD: Yet another irony of Trump trade policy. You go to classic Trump country, some farm county in the Midwest, we sell over half of our soybean exports to China, one country. That's being hit. If you're buying a John Deere tractor, that's going to be more expensive, because the steel has gone up by 30 percent.

By the way, if you want to hire low‑skilled, foreign‑born workers to work in your field, because frankly, Americans aren't interested in working those jobs, I know, Chad, I'm wedging in a separate topic here, but just to show the irony. The Trump administration's hostile to you being able to hire the foreign workers you want.

To get back to Carolyn's issue, I think there's going to be some discontent in Trump country in coming months, because of the Trump trade policies.

BOUDREAUX: I agree completely, Dan. The only question is, will they draw the connection? Will Trump supporters draw the connection? I hope they will, because the connection's there.

REESE: This actually gets to what I think each of you have written about separately, and in the narrative that I'm starting to see emerge is, "We're in a trade war. Things are escalating. This can't go on forever. People are going to be hurting their own, countries are going to be hurting their own citizens." What's the next step? I see the word negotiation appear a lot.

What do those negotiations look like? Who's involved? What's the goal of those negotiations?

GRISWOLD: We have some cooling‑off period under the Section 301 tariffs, which are the big daddy, the $50 billion tit‑for‑tat with China. At least the Trump administration is following the outlines of the law, here. There's a 60‑day comment period. I think the comments are going to be overwhelmingly negative from US industry. Let's hope so. They certainly should be.

There's a chance to negotiate, here. The Chinese don't want this. Some people in the White House may be itching for a trade confrontation. Peter Navarro had this atrocious movie in 2012, Death by China, with the not‑so‑subtle imagery of a knife coming down on the United States, and blood flowing out.

REESE: This could mean anything.

GRISWOLD: It means death by China. He's itching for a fight and an all‑out trade war, but I think cooler heads in the administration, certainly in congress, don't want this. I think there is room for negotiation. You saw with Korea, I didn't agree with all the changes to the Korean Free Trade Agreement, but the Trump administration came.

They didn't blow up the whole thing. It's basically, left it intact, I think, I don't know if it's a 50‑50 thing, but there's a good chance that we could back away from this before we have an all‑out destructive back and forth trade war.

BAUM: What about Trump seeming to link NAFTA with Mexico and immigration?

GRISWOLD: Don't get me started.

REESE: That's a whole other podcast.

BAUM: It's funny. The St. Louis, which is interesting. The St. Louis Fed had a little post on their economy blog today. It was talking about the evolution of US agricultural exports. For example, they compared the '90 to '93 period, pre‑NAFTA, to the most recent three years.

Of course, China wasn't, in terms of soybeans, even in the top five back then, and now, they're buying almost 60 billion, or 60 percent, of US soybean exports. I also noticed that Mexico, which was a very small importer of US, not small but relatively small in the top five of corn, wheat, and soybeans, just jumped hugely.

The idea that it's the, what is it? The worst trade deal, a disaster. The worst trade deal ever signed. I always wanted some reporter to actually push him on that, and ask him why it's so bad.

GRISWOLD: That's why the US farm sector is terrified at the US withdrawing from NAFTA, because it's been great for them, and just to go back to your point about the immigration. Mexican immigration to the United States, legal and illegal, has reversed. There's several reasons behind that, but one of the reasons is Mexico's relative economic stability. NAFTA has been an economic success.

It's also been a foreign policy success for the United States. It was brought the United States and Mexico closer together, after, shall we say, a fairly complicated history over the decades.

REESE: That's fair.

GRISWOLD: There was one poll, two years ago. Two thirds of Mexicans had a favorable view of the United States. The most recent poll shows that's back down to one third. One third of the Mexican public has turned against the United States. You can guess why.

BOUDREAUX: It's not a mystery.

GRISWOLD: If Mexico elects this far‑left LÛpez Obrador candidate next year, he should send Donald Trump a thank you note.

REESE: I'm going to ask you guys my wrap‑up question here, in a little bit. Start thinking about that. It's going to involve actually getting us out of this mess, and what the path forward looks like, but I do want to briefly touch on these multilateral trade agreements, since NAFTA has come up.

The United States was leading the charge on the Trans‑Pacific Partnership, and then we suddenly weren't. How does this escalating trade war with China affect the existing separate multilateral trade negotiations that are going on? In other words, we've talked a lot about the domestic effects of this trade war.

What are the second‑order ramifications in the international community?

BOUDREAUX: The most obvious thing that occurs to me, is when you take the United States, because it is such a large and prominent player on the world stage, when it loses its credibility with other countries, it's going to take, like when anyone loses credibility, it takes a while to get it back.

Even if we have another president starting in 2021 who's interested in restoring the pre‑Trump status quo, I think it might take a while for us to get our credibility back, because the United States is so volatile and un‑credible recently, about trade. It makes us, our government, a partner that is less attractive for other governments to want to deal with.

That's not good for us in the long run, by any means.

GRISWOLD: That's why this administration is not finding willing partners to negotiate new trade agreements. Japan's basically told us they're not interested in negotiating a bilateral. One of the greatest disservices, I think, of the Trump administration on trade policy is its criticism of these trade agreements. They have been great for the United States.

They have lifted the standard of living Americans, they've delivered lower prices, particularly to low income families who spend a larger share of their budget on tradeable items. They've opened up export markets around the world.

The typical country that we sign a free trade agreement with has higher trade barriers than we do when we sign the agreement. Even from the mercantilist point of view of the administration, these trade agreements are making them lower their trade barriers more than us. Don and Caroline and I would all agree that's good for both countries all around.

BOUDREAUX: Yeah.

BAUM: Withdrawing from the Trans‑Pacific Partnership that was with Asian countries ex‑China.

GRISWOLD: Yes.

BAUM: Trump seems to want to punish China. Disagreement was something that would have, perhaps, helped China toe the line.

GRISWOLD: Caroline, that's trade irony number 12 of the Trump administration.

The Trans‑Pacific Partnership, it wasn't a hostile act towards China, but it was a way of creating an alternative arrangement in that part of the world. Drawing the major trading countries in that part of the world more towards the US model of free trade, zero tariffs, protection of intellectual properties, discouraging state‑owned enterprises and all that.

What did we do by withdrawing from it? The other 11 countries have gone ahead and signed the agreement, which means, by the way, beef producers in Australia will pay far lower tariffs to enter the Japanese market than the US will. We've put ourselves at a disadvantage.

But it also has enhanced China's influence. We've withdrawn, China is filing the vacuum. One of the great ironies is, now, there's even talk of China joining the Trans‑Pacific Partnership.

BOUDREAUX: Yeah.

REESE: Right.

BOUDREAUX: Irony number 13.

GRISWOLD: Yeah.

[laughter]

REESE: Now that we've successfully painted a pretty gloomy picture of the path forward, I want to leave our listeners with a little bit of hope. We just have a minute or two left to cover this.

But other than just sort of going to the WTO, Dan, which you mentioned, what are the other sort of immediate next steps that US policy makers can or should make to improve the situation?

BAUM: Hope that Trump listens to Larry Kudlow. I don't know. Again, he seems so determined, whether he'll push the button in the long run, I just don't know.

BOUDREAUX: Yeah, I'm I don't have much in the way of optimism to share on this front yet.

I'm sorry, sticking as closely as possible to the rules and protocol of the WTO would be the thing to do. Trump does not seem to have much of an inclination to do that. He wants to act unilaterally when it suits him and when he thinks it plays with his base.

GRISWOLD: But we've had this half hour discussion of trade policy and we have not mentioned the branch of government that is explicitly charged with trade policy in the Constitution, and that's the US Congress.

BOUDREAUX: Yes.

GRISWOLD: US Congress, and I have to say, in particular, the Republican leadership in Congress has been missing in action in this.

BOUDREAUX: Awful.

GRISWOLD: They have ceded trade policy to a president who's gone rogue on trade. The founding fathers never conceived that a president would be issuing tariffs against this country and that and abusing these different laws.

I'm not very hopeful, but under ideal circumstances, Congress would reclaim its authority over trade policy and take away from this president the powers that he's been abusing on trade.

There actually has been some bills introduced to repeal the tariffs, the steel tariffs, to require Congressional approval before the president can slap tariffs willy‑nilly on all these countries. Sadly to say, those bills are going nowhere, I think we're stuck.

We still have some limits on what the president can do. We have the courts, we have our international agreements, but unfortunately, I think things may get worse before they get better.

BOUDREAUX: Yeah, keep in mind this is the same Congress that was so adamantly opposed to the seizure of administrative power by the Obama administration. But somehow, when Trump does it, they remain silent and missing in action, as Dan says.

GRISWOLD: A silver lining in all this is some of our Democratic friends are waking up to the virtues of free trade.

BOUDREAUX: Yes, that's true.

GRISWOLD: The polls show that public support for free trade, it's still a majority, but the composition has shifted.

REESE: That's interesting.

GRISWOLD: Republicans are more skeptical. Democrats are more supportive. Maybe when, if we have a change in government, the Democrats will decide, they were the free trade party for most of our history.

BOUDREAUX: Most of our history, that's correct.

GRISWOLD: Let us out of the protectionist wilderness after World War II. Let's hope they rediscover their free trade, and trade not only as an instrument of economic development, but as an instrument of world peace.

REESE: Well that is a...

BAUM: Chad, you could call this the Ironies of Trade if you need a title [inaudible] .

[laughter]

REESE: There you go. I'm going to take that finishing note from Dan Griswold as our shred of optimistic hope, the light at the end of the tunnel, dim though it may be, if you ask Dr. Boudreaux to my right here. That'll have to be it for now.

I do want to make sure that our listeners can follow everyone's work after this. Starting with Caroline, let's just go around and let people know where they can keep up with your latest online.

BAUM: If you go to marketwatch.com and just type in Caroline Baum, it'll bring you to all my columns.

GRISWOLD: Yes, and if you go...

BAUM: On Twitter, it's cabaum1.

GRISWOLD: If you go the Mercatus website and go to my profile page, you can see all the things I've done recently, and also, you can follow me on twitter @danielgriswold.

BOUDREAUX: Yeah, I don't have a Twitter account, but I do have a pretty active blog, Cafe Hayek, it's one word, C‑A‑F‑E‑H‑A‑Y‑E‑K, .com, cafehayek.com.

REESE: Sounds great, and as always, I am happy to hear your complaints, concerns, ideas, compliments, feedback, show ideas. You can email me at [email protected] or find me on Twitter @ChadMReese. Thanks for joining, we'll be happy to hear you next time.