International trade has made the world richer and freer, but its popularity is waning in some circles. Supply chain disruptions from the Covid-19 pandemic and Russia’s invasion of Ukraine have caused many Americans to look inward, advocating for new policies to encourage the national production. A Law proposition in Florida, HB 619, would require Florida government entities to use US-produced steel and iron in all government construction, maintenance, and renovation projects. Although it may seem like the patriotic thing to do, that and similar bills will increase costs for taxpayers, slow down American innovation and reduce American influence on the international stage.

The Covid-19 pandemic has prompted governments and businesses to reassess international trade. Experts and politicians have blamed years of offshoring for shortages of medications, masks, and other personal protective equipment in the early days of the pandemic. This diagnosis is doubtful at best, but the idea that more domestic production is needed in the post-Covid world is popular, at least in the polls.

Russia’s unlawful invasion of Ukraine has only amplified populist and nationalist calls for less globalization. Prior to Russia’s invasion, China was the primary target of anti-trade rhetoric and actions: it was at the center of former President Trump’s tariffs and continued by President Biden. Now Russia has replaced China, at least momentarily.

The Biden administration recently banned imports of Russian oil, and it was able to do so in part because Russia is not a major source oil for America. Other European countries are unable to follow the American example as they depend on Russian oil and natural gas for their energy and currently lack good alternatives. Germany is particularly dependent on Russian oil and natural gas, which has hampered its ability to respond to Russia’s belligerent behavior.

In the long term, however, the United States should not use the war in Europe as a reason to go it alone. State and federal bills that put American manufacturers first, like Florida’s, will make America and the world less productive, less innovative, and less secure.

A direct effect of the Buy American rules is to insulate domestic firms from international competition. This results in higher prices now and lower quality products in the future due to less innovation.

Companies themselves know this. In the 1970s, the American steel and automobile industries were protected from international competition by quotas and tariffs. The two sectors waded rather than prosper: product quality suffered, brands were harmed, and consumers shunned their products.

American companies were eventually forced to adapt to compete with higher quality foreign producers. The quote below from the 1980 annual report of the American Iron and Steel Institute—which represented many steel companies—summarizes the cause of their failure:

“Inadequate capital formation in any industry produces meager productivity gains, upward pressure on prices, slow job creation and faltering economic growth. These effects have been amplified in the steel industry. Inadequate capital formation[…]prevented proper replacement and modernization of steel plants, which hampered the productivity and efficiency of the industry.

History will repeat itself if we try to support American businesses again. They will become complacent since it will no longer be necessary to compete with each other to attract captive domestic consumers. The interests of complacent big business will intertwine with those of the government that protects them. This will make too big to fail the norm and stifle new business creation. Economic growth and innovation will both slow down, which will hurt the whole country. states with major portslike California, New Jersey, Georgia, Washington and Virginia, will suffer the most.

The alternative is vigorous competition between domestic and foreign producers through international trade. Trade strengthens individual freedom, increases economic growth, stimulates innovation and helps spread support for free markets and representative government. There is also evidence that free trade, i.e. trade free from tariffs, quotas and other government imposed restrictions, reduces military conflict between nations. As Economist Scott Sumner recently wrote:

“Our best hope for world peace is to entangle every country so deeply in a web of interdependence with its neighbors that even our…leaders will be able to see the sum-negative nature of war. Globalization may not prevent war, but it makes war less likely at the margin.And if war does break out, economic interdependence gives us a weapon to use instead of violence.

And because international trade makes countries richer, they have more to lose from the disruption and destruction caused by war.

Although the benefits of globalization have been overstated in some ways, it remains true that stronger economic relations between countries make the world safer and less violent.

Rather than retreat from the global economy, now is the time for America to lead the way in fostering relations with other free countries. The economic freedom of the world Index ranks 165 countries on the extent to which their policies and institutions support voluntary exchange, property rights, personal choice, and the ability to enter and compete in markets.

There are 82 countries in the first two quartiles of the index, and these are the countries with which America should prioritize trade. five of The first six Americans trading partners are already in the first two quartiles. Only China looks outward. Other relatively free countries among America’s top 15 trading partners include Taiwan, the United Kingdom and Ireland.

The United States also has the opportunity to pursue greater economic integration with Ukraine and similar countries once the current violence subsides. Many Ukrainian towns, factories and enterprises will have to be rebuilt. More trade and private investment with Ukraine will allow American businesses and investors to contribute to Ukraine’s future economic success. Investments in businesses, supply chains and infrastructure will help Ukrainian workers and consumers, while increased trade will provide a larger market for goods and services produced by Ukrainians.

We are currently assisting Ukraine by providing weapons and supplies for its defence. But in the long term, a trade-based economic relationship with Ukraine will bring much more benefit to both of us.

Reducing trade with authoritarian countries like China and Russia and increasing trade with freer countries like Indonesia, Mexico or Peru will not happen overnight. It will take time to reorient supply chains, find trading partners with the right comparative advantages, and reduce the tariffs, regulations, and other government barriers that currently impede trade with various countries. But with the right policies and private sector investment, America can strengthen trade relationships with countries that share our values.

It is important to remember that reducing trade with totalitarian countries like China and Russia does not mean that we should isolate ourselves. There are dozens of other countries that share America’s values ​​and would welcome the opportunity to strengthen their economic relationship with us. Political leadership that recognizes the many benefits of free trade and a private sector that recognizes the uncertainty and dangers inherent in supply chains located in authoritarian countries can work together to put us on a more prosperous path: not the one of independence and isolation, but of cooperation and community.