U.S. Trade with South Korea

 

Photo by Chanaka on Pexels.com

 

Doing some research on trade policy I happened to come across a very interesting website. It is hosted by the Korean Trade Association and details the by state,  what the state imports from South Korea, and what each state exports to South Korea. Many of you may be wondering why would I take arbitrary interest in such a specific topic? My interest isn’t t arbitrary. My first professional job after college was working for the Korean steamship line Hanjin Shipping. I stayed with the company until they closed the doors to their Chandler, Arizona office on December 31st, 2016.

 

To this very day, I miss working there. More importantly, working at Hanjin taught me a lot about applied economics. Working primarily with freight being imported from the Trans-Pacific corridor, you begin to intimately understand how crucial international trade is for the U.S. economy. Adam Smith’s proverbial “invisible hand” finally began to take on a life of its own. Animating Leonard Read’s iconic essay I, Pencil.Seeing for myself that markets are self-guiding with the seemingly endless flows of goods from Asia coming into U.S. shores. Witnessing the invisible hand at work helped insulate me from the straw man arguments and other fallacies supporting protectionist rhetoric. Much of which has come back in vogue amid the rise of the Trump presidency. Imports do not destroy jobs, but rather creates them.

 

Many who use the displaced factory worker as the poster-child for the downtrodden victims of outsourcing are not seeing the whole picture. The displaced factor worker toiling to produce widgets is only a small sliver of the national economy. When you impose tariffs and other trade restrictions there are many unintended consequences. Frédéric Bastiat’s premise of the seen and unseen (later clarified by Henry Hazlitt). The superficial effect of trade barriers is that such restrictions keep out foreign competition.  The what is not seen are all the jobs lost due to these restrictions. Many jobs rely on the importation of goods.  Everything from stevedoring, freight forwarding services, to even trucking, are vocations highly dependent on imports. Demonstrating a natural shift in the job market. The economy is subject to economic laws such as the law of supply and demand and the law of comparative advantage. Any time we try to implement policies that go against these immutable laws there are adverse consequences. Attempting to work around economic law is analogous to attempting to defy gravity. Eventually, you will be pulled down by the gravitational force of the Earth.