Mr. President, Tear Down These Economic Distortions!

Earlier today, in an open letter to President Donald Trump, we joined with more than 150 economists from universities, think tanks, and businesses across the country to urge the president to confront one of the most damaging and least-discussed obstacles to global prosperity: international anti-competitive market distortions (ACMDs).

For decades, trade debates have been dominated by tariffs—the visible, headline-grabbing taxes that nations impose on imports and, occasionally, on exports. Tariffs are easy to measure. Yet they are only the tip of the iceberg. Beneath them lies a complex and far more damaging set of distortions that quietly undermine competition and economic growth: discriminatory regulations, state subsidies, and other “protections” that favor domestic champions over foreign competitors.

ACMDs invariably sap productivity, distort the economy, and destroy wealth.

Our open letter to President Trump, printed below in its entirety and signed by some of the country’s most prominent economic theorists and practitioners, asks the president to use this moment and the leverage of U.S. trade policy to lead a global reset. The Trump administration has rightly highlighted the shortcomings of America’s trade relationships. The problem is real. But the true injustice lies not just in tariff schedules but in the deeper, structural distortions that prevent open and fair competition.

Over the past several decades, the international trading system has generally succeeded in reducing tariffs across the board. What it has not done is meaningfully address non-tariff barriers, including regulatory manipulation. As a result, the most consequential obstacles to faster economic growth today are not at the border, but behind it.

When a government shields its state-owned enterprises with veiled subsidies or tilts domestic regulation to crowd out foreign firms, it is engaging in protectionism by another name. Economists increasingly agree that the impact of these non-tariff distortions likely exceeds that of tariffs several times over.

President Trump’s instincts—to question complacent trade orthodoxy and demand reciprocity—have opened a rare window of opportunity. Whether one agrees with his particular approach, the administration’s willingness to confront entrenched interests and rethink policy from first principles is welcome.

What’s needed now is a clear framework: U.S. trade agreements should be evaluated and negotiated on the basis of how effectively they reduce all anti-competitive market distortions, not just tariff barriers.

A strategy focused on ACMDs would produce enormous dividends. Even modest reductions in these distortions would lift U.S. and global per capita GDP.

A recent study by the Competere Foundation for the independent Growth Commission on which we both sit suggests that if countries want to spur economic growth, they would be wise to 1) dismantle laws and regulations that distort domestic competition and 2) abolish tariff and non-tariff barriers that distort international competition. The Competere Foundation study estimates that, if the United States were to do these things, U.S. per capita GDP would jump by an extra 31 percent over ten years.

Fortunately, the United States is uniquely positioned to lead this effort. American markets remain among the world’s most open and competitive. That gives President Trump the leverage he needs to force change on America’s reluctant trading partners.

A trade policy centered on dismantling global market distortions would align perfectly with America’s comparative strengths—rule of law, transparency, fervent entrepreneurism, and never-ending innovation. It would also place the U.S. at the moral center of a new pro-growth international consensus.

This is not a partisan appeal. It is a call to return trade policy to its first principles: fair competition, open markets, and the creation of wealth through voluntary exchange. The U.S. can and should use its diplomatic and economic leverage to encourage its trading partners to do the same.

Mr. President, tear down these economic distortions! The wealth of nations—and the prosperity of billions—depends on it.

Dear President Trump,

We the undersigned write to ask the US government to tear down international anti-competitive market distortions (ACMDs). Your administration's policy provides an opportunity for a reset to deal not only with tariff barriers but also with all market distortions that damage the competitive process and thus destroy wealth. Regrettably, these ACMDs, which include both traditional tariff and non-tariff barriers as well as regulatory matters that distort ordinary market competition and lack of property rights protection, have not been well addressed in the international trading system or by major trading countries in the past thirty years. These issues are major impediments to economic growth, and indeed recent economic models suggest that the costs of non-tariff ACMDs may be considerably more impactful than conventional border barriers.

The Trump administration is right to highlight the problem with its proposed trade realignment. While many of us differ on the medicine we would use to treat the problem, we think that a framework that measures the US’s trade agreements with other countries on the basis of their success in lowering these ACMDs should ground US trade policy actions at this time. A systematic reduction of ACMDs across the board in all countries would be a significant boost to U.S. and global GDP per capita, giving opportunity and hope to billions.

Sincerely,

Alden Abbott, George Mason University

Zoltan Acs, George Mason University

Anup Agrawal, University of Alabama

Michael Alderson, Saint Louis University

JJ Arias, Georgia College & State University

Dom Armentano, University of Hartford

Lowell Bassett, University of Washington

Don Bellante, University of South Florida

Daniel K. Benjamin, Clemson University

Walter E. Block, Loyola University, New Orleans

Cecil E Bohanon, Ball State University

Michael Bond, Arizona State University

Barbara Bowie-Whitman, The Growth Commission

Scott Bradford, Brigham Young University

Robert L. Bradley Jr., Institute for Energy Research

Phillip J. Bryson, Brigham Young University

Richard Burdekin, Claremont McKenna College

Henry N. Butler, George Mason University 

Robert T. Carey, Clemson University

James Carter, Navigators Global

Julia R. Cartwright, The American Institute for Economic Research

Robert E. Chatfield, University of Nevada, Las Vegas

Barry R. Chiswick, George Washington University

Susan Christoffersen, Thomas Jefferson University

Warren Coats, International Monetary Fund

Joe Cobb, Congressional Joint Economic Committee, 1985-91

Robert A. Collinge, University of Texas, San Antonio

Roy Cordato, The John Locke Foundation

Mark Crain, Lafayette College

Clyde Wayne Crews Jr., Competitive Enterprise Institute

Kirby R. Cundiff, VCI Asset Management

Paul F. Cwik, University of Mount Olive

D. Allen Dalton, Boise State University

Larry Dann, University of Oregon

Robert Dekle, University of Southern California

Abigail Devereaux, Wichita State University

Arthur M. Diamond, Jr., University of Nebraska, Omaha

Gregg Dimkoff, Grand Valley State University

Gerald Dwyer, Clemson University

Isaac Ehrlich, University at Buffalo

Kenneth G. Elzinga, University of Virginia

Richard W. England, University of New Hampshire 

Steve Entin, Tax Foundation

Richard E. Ericson, East Carolina University

John Estill, San Jose State University

Frank Falero, California State University

John A. Flanders, Central Methodist University

Garry Flemming, Roanoke College

Michele Fratianni, Indiana University

Douglas C. Frechtling, George Washington University

Caleb S. Fuller, Grove City College

Moheb Ghali, Western Washington University

Anthony Gill, University of Washington

David Gillette, Truman State University

Stephan F. Gohmann, University of Louisville

Peter Gordon, University of Southern California

Eric S. Graber, University of Maryland Global Campus

Philip Graves, University of Colorado, Boulder

William Green, Sam Houston State University

R.W. Hafer, Southern Illinois University, Edwardsville

Stephen Happel, Arizona State University

Lydia Harris, Goucher College

Daniel Heath, Institute of International Economic Law

Scott Hein, Texas Tech University

Robert Heller, Federal Reserve Board, 1986-89

James W. Henderson, Baylor University

John Hoehn, Michigan State University

Arlene Holen, Technology Policy Institute

Charley L. Hooper, Objective Insights, Inc.

Daniel Houser, George Mason University

Miren Ivankovic, Anderson University

Jerry L Jordan, Council of Economic Advisers, 1981-82

Demetrius Kantarelis, Assumption University

James B Kau, University of Georgia

Barry Keating, University of Notre Dame

John Kessler, Purdue University

Richard Kilmer, University of Florida

Richard M. Kirk, Georgia State University

Cory Krupp, Duke University

David Laband, Auburn University

Nicholas A. Lash, Loyola University, Chicago

Thomas Lenard, Technology Policy Institute

Christopher Lingle, Universidad Francisco Marroquin

Zagros Madjd-Sadjadi, Winston-Salem State University

Herman Manakyan, Salisbury University

Richard D. Marcus, University of Wisconsin, Milwaukee

Michael L. Marlow, Polytechnic State University, San Luis Obispo

Timothy Mathews, Kennesaw State University

Michael J. McIlhon, Metropolitan State University

W. Douglas McMillin, Louisiana State University

Douglas McWilliams, The Growth Commission

Roger Meiners, University of Texas, Arlington

Francois Melese, Naval Postgraduate School

Stephen T. Mennemeyer, University of Alabama, Birmingham

James C. Miller III, George Mason University

Jeff Milyo, University of Missouri

James Moncur, University of Hawaii, Manoa

Barry Morris, University of North Alabama

Chris Muscarella, Penn State University

Robert Nachtmann, University of Texas, El Paso

Patrick Newman, University of Tampa

David Ozgo, Advocacy Analytics, LLC

Donald O. Parsons, George Washington University

EC Pasour, North Carolina State University

Judd W. Patton, Bellevue University

Mark V Pauly, University of Pennsylvania

William Peirce, Case Western Reserve University

Timothy Perri, Appalachian State University

Charles R. Plott, California Institute Of Technology

Arturo Porzecanski, American University

James E. Prieger, Pepperdine University

Stephen W. Pruitt, University of Missouri, Kansas City

Christine P. Ries, Georgia Institute of Technology

Nancy Roberts, Arizona State University

John W Rowe Jr, University of South Florida

Tony Rufolo, Portland State University

Nicholas Rupp, East Carolina University

John Rutledge, Claremont Graduate University

Joseph Salerno, Mises Institute

James W. Saunoris, Eastern Michigan University

Frederic Sautet, The Catholic University of America

John Scott, University of North Georgia

Robert Seeley, Wilkes University

Carlos Seiglie, Rutgers University

Stephen Shmanske, California State University, East Bay

Gene Silberberg, University of Washington, Seattle

John Silvia, Dynamic Economic Analysis

Shanker Singham, The Growth Commission

Vernon L. Smith, Chapman University

Charles Starnes, Wayland Baptist University

Charles N. Steele, Hillsdale College

Bernell K. Stone, Brigham Young University

Thomas Stratmann, George Mason University

Michael Sullivan, University of Nevada, Las Vegas

Daniel Sutter, Troy University

Andre Switala, Boston University

Gil Sylvia, Oregon State University

George B. Tawadros, Winona State University

Shawn E. Thomas, University of Pittsburgh

Henry Thompson, Auburn University

Alex Tokarev, Northwood University

Richard Vedder, Ohio University

Deborah Walker, Fort Lewis College

Sherri Wall, University of Alaska, Fairbanks

John T. Warner, Clemson University

Andrew Weintraub, Temple University

Lonny L. Wilson, William Penn University

Michael Wohlgenant, North Carolina State University

Gary Wolfram, Hillsdale College

Bill Yang, Georgia Southern University

Madelyn Young, Converse University

Clare W. Zempel, Zempel Strategic

Jerry Zimmerman, University of Rochester

Joseph Zoric, Franciscan University of Steubenville

Benjamin Zycher, American Enterprise Institute