Trade policy can pick winners and losers. So can not having a policy

They’re the questions on which deep contemplative philosophical discussions, or at least late-night beer-fueled college-student debates, are based: If a tree falls in the forest and no one is around to hear it, did it make a sound? What is the sound of one hand clapping?

And, does not making a choice mean you have, in fact, made a choice?

That last one is a useful question to keep in mind as we watch the latest rounds of trade brawls principally featuring the United States, Europe and China smashing furniture over one another’s heads (and that’s not to slight the multitude of trade skirmishes involving other countries.)

For Washington state, much of this is nothing new.

Whether it’s the seemingly perpetual Boeing-Airbus and softwood lumber cases, or shorter-term fights involving agricultural products like apples, the state — because of geographic location and the products it makes — often finds itself directly involved in trade disputes.

What’s different this time is the breadth, depth, intensity and uncertainty of outcome. Many trade cases are inconclusively concluded, with a high ratio of bluster to actual change in conditions or behavior.

This time, however, the bluster is more pointed and bitter, the proposed remedies and the retaliatory measures they inspire are more draconian — and the impacts much more real to a lot more people.

Trade disputes aren’t just international conflicts. They also set domestic interests and groups at odds.

Steel has figured in trade cases literally for decades. (Your columnist began his newspapering career more than 40 years ago covering the steel industry’s complaints about imports.)

Limiting those imports by quotas or raising their price through tariffs is great for American steel makers. It’s not so hot for companies that use steel to make other things, such as cars or appliances. Domestic sugar producers and the American candy industry have long been mad at each other over imports.

In Washington, a Longview newsprint mill has successfully pushed the U.S. government to impose duties on imports of that product from Canada. That’s good news for North Pacific Paper Co., which says it’s been able to recall workers and restart a paper machine.

Newspaper publishers, on the other hand, have squawked loudly about higher prices for an essential material at a time when the industry’s financial model is already a mess.

The United States and China have been embroiled in a multi-year tangle over importation of solar-energy panels.

Domestic producers contend the sale of cheap imported panels has decimated their industry (among the companies that have closed are two in Washington). Installers of residential solar-energy panels say the decline in prices has made such systems more affordable for American homeowners (and generated more business for them in the bargain.)

Trade fights also have a way of ensnaring bystanders, as has happened with REC Silicon, the operator of a Moses Lake plant that makes polysilicon, a raw material in making photovoltaic cells for solar-energy panels.

When the United States took action against imports of Chinese panels, China retaliated by clamping down on imports of the stuff that RC Silicon makes. The result has been layoffs and a big expensive plant operating at 25 percent of capacity and with an uncertain future.

Now it’s ag’s turn.

In response to American tariffs on Chinese products, China has imposed tariffs on American agricultural products. That’s no small matter for a state like Washington, which not only grows a lot but also sells much of what it produces to the rest of the world (not to mention the port facilities in Tacoma and elsewhere that get the state’s output to foreign buyers.)

The U.S. Department of Agriculture is proposing $12 billion of temporary relief to farmers (including producers of some Washington crops including wheat) affected by China’s actions.

But the ag industry is calling for the Trump administration “to recognize this self-inflicted damage and to end the trade war immediately” by dropping the tariffs that prompted China’s retaliation, according to a statement from the Washington Association of Wheat Growers.

And here’s where we get reacquainted with our old friend, the philosophical question about decision-making.

A prime criticism of many economic, financial, tax and trade policies is that they assign to whoever is setting those policies (usually government) the job of picking the economy’s winners and losers, which ought to be left to markets. Aside from it not being very good at it, allowing government to make such decisions opens it up to all manner of influence-peddling.

But if setting trade policies to protect or nurture specific domestic industries is picking winners and losers, so is not establishing such policies.

Whose interests get the greater sway? (And, by the way, you as a consumer are one of those competing interests. Should you pay more to protect someone’s job, or is the health of your household most important?) Those with the greatest political or economic clout? Those with the most to lose?

For some workers, companies and industries, those long moved from philosophical questions to real-world conundrums. A whole lot more people are about to be pulled into the discussion, with no more prospect of coming up with a satisfactory resolution than anyone else has achieved thus far.

This story was originally published July 25, 2018 at 2:28 PM.