Most Libertarians have a poor understanding of Free Trade. I debated this issue with 2 others a few days ago and when they could not defeat me intellectually, they hurled abuses and ran away.
Here is what I said, (combining of two posts):
You are proposing trade without tariffs which is arbitrage trade, not free trade at all.
Marx supported free trade without tariffs. Here is what he said more than 100 years ago:
...the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point…the Free trade system hastens the Social Revolution. In this revolutionary sense alone...I am in favor of Free Trade...
Founders knew better. They supported general tariffs to pay for defense, foreign affairs, treasury, and justice, the 4 constitutional departments.
Some force is necessary to protect life, liberty and property. National Defense, local police, tariffs are those things.
Under general tariffs, Govt does not dole out tax payer money or regulatory favor to either ford or toyota or both.Or block entry of a new player. Under general tariffs All japanese, koreans, germans, etc are welcome to compete in US with Americans with zero corporate tax, 0 income tax, 0 sales tax etc.
So tariffs are not govt intervention. Your accusation would be valid if tariffs were designed to artificially prop up GM, Chrysler, etc, to compete against Honda, which would make them subsidies or protective tariffs, not general tariffs.
There is no tariff between 50 States because constitution organizes all 50 States under federal govt.
If China and US were under single govt with common constitution, then yes I would agree to tariff free trade with China.
If all nations were under world govt with world army and world constitution, then yes tariff free world trade makes sense because then there is no arbitrage.
"Who cares if Toyota dumps their products". - The answer to that is simple. You need single set of laws, rules, regulations under single national govt governing both Japan and US.
Without tariffs, free trade is like one side playing judo and other side playing football with other other. The contest would turn into a circus.
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