Advocates of tariffs and other trade barriers often claim that their goal is “fair trade.” If another country imposes tariffs on American products, the argument goes, it is only fair for the American government to impose tariffs on products from that country. But this argument ignores a simple fact: trade does not occur between nations. Trade occurs between individuals.
If I buy a product from a business located in Ohio, the trade does not occur between Texas and Ohio. The trade occurs between me and the business owner. The principle does not change just because the business is located in Mexico, China, or any other country.
Tariffs and other trade restrictions interfere in the freedom of individuals to trade with one another. Let us say that a Canadian wants to sell newsprint for $X, and an individual is willing to pay that price. However, tariffs prohibit him from acquiring the newsprint for that price. Tariffs artificially inflate the cost. What is fair about that? The two parties involved agreed to a price that each found acceptable, but government intervention prevents them from trading as they choose, as they think fair.
When individuals are free to trade as they deem best, they will do so only when they regard the terms and conditions as fair. Otherwise, they will walk away from the deal. When they are not free, fair trade is impossible because a third party is imposing arbitrary conditions on them–conditions that they do not desire and would not voluntarily accept.
Free trade means the absence of coercion in economic affairs. It means that individuals can produce and sell the products of their choosing on the terms they think best. It means that consumers can accept or reject the offers made by producers. It means that each individual is free to use, trade, and dispose of his property as he chooses. If we want fair trade, then we must advocate for and defend free trade.