“You cannot legitimately argue against international trade by pointing to real or imaginary problems with trade in general. An argument against international trade must isolate something unique about trade that crosses international borders. That argument must then plausibly explain why that unique something renders exchanges that take place across political borders detrimental to the domestic economy.”

November 11, 2012 § Leave a comment

“You cannot legitimately argue against international trade by pointing to real or imaginary problems with trade in general. An argument against international trade must isolate something unique about trade that crosses international borders. That argument must then plausibly explain why that unique something renders exchanges that take place across political borders detrimental to the domestic economy.”

Don Boudreaux  http://cafehayek.com/2012/11/open-eyes-on-trade.html

Company A makes a product in China for $1 and sells it to Company B in the Caymans for $1.01.

Company B sells it to Company C in the USA for $100, which sells it to the public for $101.

Company A doesn’t make any profit.

Company B makes the profit but doesn’t pay any taxes.

Company C doesn’t make any profit.

All three are owned by the same investors.  Tax free gains.

“…isolate something unique about trade that crosses international borders.”

This is unique to international trade, because it is tax fraud domestically and the IRS would force them to consolidate their financial statements.

“…detrimental to the domestic economy.”

Lost tax revenue.

Check please.

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