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Trade Is Not a Four-Letter Word

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Trade Is Not a Four-Letter Word

How Six Everyday Products Make the Case for Trade

Avid Reader Press,

15 min read
7 take-aways
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What's inside?

Trade deficits are meaningless, says trade expert Fred P. Hochberg.

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In this engaging study, a true believer in trade sings the praises of the flow of international goods. Fred P. Hochberg, former head of the US Export-Import Bank, uses avocados, iPhones and Hondas to explain just how much supply chains have changed in recent decades. Hondas, he reports, are the most American cars on US roads, even more so than such icons as the Chevy Corvette and Ford F-150. Though he acknowledges the economic pain of those on the wrong end of globalization, Hochberg nonetheless makes a compelling case that trade deficits don’t really matter at all.


Trade affects consumers everywhere in the world.

What Americans buy – and how much it costs – is largely a function of global supply chains and international trade policy. Trade, of course, brings trade-offs. A pact that allows for denim imports to the United States could result in the closing of an American textile mill. For the workers who lose their jobs, the shift would be difficult, even catastrophic. However, the broader result is lower prices for denim products. Dozens might lose their jobs, but millions of working-class families can then afford blue jeans. And globalization has lifted a billion people out of poverty, including hundreds of millions in China and India.

President Donald Trump made trade a centerpiece of his administration, and he aggressively imposed tariffs. While he touted tariffs as a way to protect American jobs, the actual effect is that tariffs act as a tax on US consumers and raise the prices of imported products. Trump isn’t the first politician to portray trade as American workers’ enemy: During the 1992 presidential campaign, third-party candidate Ross Perot criticized...

About the Author

Fred P. Hochberg was chairman and president of the Export-Import Bank of the United States from 2009 to 2017. 

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