Eagle Forum Legislative Alerts

Wednesday, May 04, 2011

Ronald Reagan's Policy on Trade

The promoters of what is mistakenly called "free trade" often cite Ronald Reagan as authority, claiming he was a believer and advocate of free trade. That's not true. Reagan's economic and trade policies were grounded in the belief that his number-one task was to win the Cold War and defeat the evil empire, so his trade policy was subordinated to that goal.

Reagan's principal policy to bring about the Soviet Union's collapse was his effort to try to spend the Soviet Union into the ground through a unprecedented American military buildup, while denying the Soviets access to Western technology and capital that could have helped them militarily and economically. The Soviet economy was becoming less and less productive and lagged badly in the technologies that were so critical for military superiority.

Reagan intensified the Soviet predicament in three ways. First, he imposed very tight Western restrictions on technology transfers to the Soviet bloc. Second, he blocked Soviet access to Western capital wherever he could. Third, and most important, he launched a big technology-led American military buildup with which the Soviet Union was unable to compete.

Regrettably, our later Presidents have not followed the Reagan policy in dealings with China, which is using the cash it gets from selling us cheap goods to build up the most modern and threatening military establishment in the world. Our government has done nothing to stop the export of our best technology to China, which regularly engages in predatory trade practices such as currency manipulation, government subsidies to Chinese manufacturers, allowing Communist China to force American companies to give China their patents and trade secrets, dumping of their products below cost, and outright theft of our patents and industrial know-how.

Listen to the radio commentary here:

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