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Comment by savanaly | Hacker News Reader

>so we arent being taken andvantage of

For the last time...that's not how trade works! People who say this in this context mean well, but are committing the exact same category error/misunderstanding of economics that Trump and his supporters are.

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It is 100% how trade works. Free trade for both sides = good for both sides. Lopsided deals where one side gets the free flow of trade but the other side gets protectionism = exploitative.

What is the category error here? Where is the misunderstanding?

If you really believed what you wrote, why do you think trade deals exist in the first place? What function do you think they serve?

I'd guess that they're saying is, the point of trade, from a country's perspective, is to get imports. Exports are what you give up to obtain them (comparative advantage). So, when the US puts tariffs on Canadian goods, the main people who eat that cost are American consumers and firms buying those goods...basically, it's a tax Americans pay to Americans. Canada loses some export markets, however, the US isn't "extracting" anything...both sides just get less of a mutually beneficial thing.... So, In that faming, "one side gets free trade, the other gets protectionism" is in theory, a situation where the protectionist country is mostly shooting itself in the foot, not beating its partner. By the same theory, retaliating by taxing your own citizens purchases of American goods doesn't undo the damage... it adds to it. Also fwiw, a trade deal isn't a swap of comparative advantages, it's a bundling where each side concedes in sectors it can politically afford to lose in, inorder to win in sectors it cares more about. For example Canada protects dairy and gives ground on autos.

Protectionism is harmful to both sides though, not just the one being "protected". If Thailand can more efficiently produce socks, and Canada can more efficiently produce lumber, it doesn't make sense to "protect" the Canadian sock industry. It just makes socks more expensive for Canadians. Let those Canadian sock workers go produce lumber instead.

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