Is the Washington Post Opposed to the European Union?

May 06, 2018

That is what readers of its lead editorial must be wondering. The editorial criticized Trump’s trade policies, pointing out that the policies are creating uncertainties for businesses.

It then notes that Trump appears to view uncertainty as being a positive outcome:

“Last month, in fact, the president all but confessed that he sees uncertainty as a weapon against them in talks over revising the North American Free Trade Agreement. ‘We can negotiate forever,’ he said. ‘Because as long as we have this negotiation going, nobody is going to build billion-dollar plants in Mexico.'”

The editorial then responds:

“Oh no? Canada and Mexico can, and do, hedge against Mr. Trump’s unpredictability by pursuing closer economic ties with China and Europe.”

It is not clear what sort of economics the Post is using here. In standard trade models, the United States benefits when the economies of our trading partners are stronger. If greater integration between Canada and Mexico and China and Europe allow them to grow more rapidly, they will be better customers for US products. Also, insofar as greater integration leads to increased efficiencies for their producers, it means that we will be able to buy lower-priced imports, benefiting US consumers.

If the Post has an economic model whereby we are supposed to be scared because our trading partners are becoming more integrated, it should share it with its readers. (Maybe it will get a Nobel Prize in economics.) As it is, this just looks like a cheap scare tactic to advance its trade agenda.

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