U.S. policy in recent years has not been favorable to free trade. Former president Donald Trump boasted that he was a “tariff man” while imposing tariffs on steel, aluminum, and finished goods such as washing machines. Trump also decided against having the United States join the Trans-Pacific Partnership and demanded that the North American Free Trade Agreement (NAFTA) be renegotiated, though the ultimate revisions were relatively minor. (See “Is NAFTA 2.0 Better than Nothing?” Winter 2018–2019.) While President Biden has scaled back some of Trump’s tariffs, he has kept and even extended others. Free trade could use a friend right about now.

Into that role steps Fred Hochberg with Trade Is Not a Four-Letter Word. As a young man, Hochberg was an executive of family company Lillian Vernon, a direct marketing firm with suppliers in many countries, including China. Later, he headed the Export–Import Bank (EXIM) for eight years during the Obama administration, so he has both private sector and governmental international trade experience. Hochberg’s noble goal in Trade Is Not a Four-Letter Word is “to puncture the myths, unpack the arguments, and connect all the dots so [readers] can see the full picture of what trade really is.”

Before discussing the book, it is worth noting two things that it is not. First, it is not solely a response to the Trump administration’s protectionist policies. To be sure, Hochberg criticizes those policies, but there is much more to the book than rehashing Trump’s awful trade agenda. Second, it is not merely an advertisement for EXIM. The book plays up EXIM in several places—including a thinly veiled response to critics who deride it as the “Bank of Boeing”—but overall EXIM is a fairly small part of the book.

The book is organized in three parts: the first consists of three chapters on trade history and myths about trade; the second is six chapters about six products that Hochberg argues make the case for trade; and the third consists of two chapters ostensibly devoted to (unpleasant) realities about trade and remedies to them. Rather than discussing the book along the lines of its organization, I think it is more useful to discuss how it treats important trade concepts such as imports, tariffs, and trade deficits because they are discussed across multiple chapters.

Virtue of imports / Hochberg defines trade as “the exchange of goods and services for mutual benefit.” He also bemoans “victims of U.S. trade policy.” Based on his definition of trade, one might expect these are people who have been prevented from engaging in mutually beneficial exchange by some sort of trade barrier. However, that’s not what he means; rather, he’s referring to people who may have lost jobs to import competition after the U.S. government reduced tariffs or other trade barriers. For this reason, he includes “trade is win–win” among his myths.

Hochberg nicely explains several ways Americans benefit from imports. Consumers can “eat mangoes in December [and] choose between dozens of cheeses.” He points out that supermarkets in 2008 stocked 47,000 items, a five-fold increase since 1975 (though much of the increased variety is domestically produced). Consumers benefit from lower prices: “An America that makes everything at home would be a land of $10 bananas [and] $100 shirts.” Many of our popular entertainment options such as The Masked Singer and Veep are derived from programming in other countries, while ostensibly American-created shows such as Game of Thrones feature international casts and are shot in overseas locations.

Many seemingly American-made products contain key inputs obtained abroad. Hochberg makes this point by reminding readers about the harm Trump’s steel and aluminum tariffs imposed on the U.S. beer and automobile industries. To emphasize the importance of imports, he includes the notion that “the less we import, the better off we are” as one of the myths about trade.

Having realized the virtues of imports, it is unfortunate that he is less clear about exports. Instead of realizing that exports are the price we pay for imports—and that fewer exports would mean imports are being obtained more cheaply (assuming, for now, no trade deficits or surpluses)—Hochberg cheers on larger amounts of exports. For example, he applauds EXIM’s role in financing exports (never addressing the obvious question of why the world’s sophisticated financial markets could not perform the same task), writing that one of the benefits of NAFTA is that all three signatories “thrived as exporting heavyweights,” and that the United States should want to be an export powerhouse. Conversely, he frets that in the early 2000s China “pass[ed] us and Germany to become the number one exporter in the world.” However, there’s no prize for being the country with the largest volume of exports; moreover, these rankings may be largely attributable to population size because the United States ranks 50th in exports per capita while China ranks 83rd (tiny Liechtenstein is first).

Debunking myths / Because politicians often impose trade barriers to curry favor with constituents, Hochberg also discusses this important dimension to trade. He points out that non-tariff barriers may be more significant impediments than tariff barriers. Also, pushing back against one of Trump’s flawed perspectives on trade, he includes “tariffs are paid by foreigners” among his list of trade myths. However, in saying tariffs “get paid by U.S. citizens to the U.S. government,” he overlooks the difference between statutory tax incidence (who remits the payment to the government) and effective tax incidence (how the tax’s burden is split after prices adjust, a split that depends on the elasticities of supply and demand). That he points out just a few pages later that China’s retaliatory tariffs caused U.S. soybean producers to receive lower prices for their crops reinforces the fact that statutory incidence and effective incidence are not the same.

Regarding trade deficits, Hochberg includes “bilateral trade deficits matter” among the myths about trade. He correctly points out that trade deficits are not akin to debts that must be repaid and notes that knowing someone has a trade deficit with his grocery store tells us nothing about the person’s financial position. However, Hochberg could have added that countries have many trading partners and could have an overall trade balance while running deficits with some countries and surpluses with others.

His discussion, or lack thereof, about multilateral balance of payments is one of the weakest parts of the book. He writes that an “overall trade deficit can have economic consequences if it gets too far out of hand” (emphasis in original). However, he is silent about what those consequences might be or what constitutes getting “too far out of hand.” Nowhere does he explain that trade deficits and capital flows are related. (Countries running deficits have net capital inflows and vice versa.) Because Hochberg quotes Harvard economist Larry Summers as saying “the trade deficit is a terrible metric for judging economic policy,” it is disappointing that the book’s “Remedies” chapter did not recommend having government statistical bureaus stop calculating and reporting trade deficits. Instead, his proposed remedies include various tweaks to the social safety net and job training programs, as well as including labor and environmental interests in trade negotiations.

While balance of payments issues may be the weakest treatment in the book, Hochberg’s excellent explanation of how trade expands the possibilities of what we can obtain from human cooperation is one of the book’s strongest points. Apple’s iPhone is one of the six products that he argues make the case for trade. He writes of the iPhone: “Building a product this sophisticated would never be possible within the confines of California—or anywhere else for that matter.” He then explains that more than 700 suppliers located in dozens of countries play a role in producing iPhones and proceeds to walk readers through examples ranging from China to Switzerland to Rwanda to upstate New York. The iPhone chapter includes an appropriately stinging description of Wisconsin’s Foxconn debacle, and it concludes with perhaps the best sentence of the book: “If we Americans were ever left to our own devices, we’d be left without very many devices of our own.” (His chapter on the most American car on the road—it’s the Honda Odyssey according to how these things are calculated, while the Chevrolet Spark has the lowest percentage of U.S.-produced parts—is also a good discussion of how trade facilitates human cooperation.)

Hochberg’s explanation of international trade is somewhat uneven, but he clearly understands both the role that it plays in human flourishing and how the current political environment would benefit from pro-trade voices. While I cannot give his book an unqualified endorsement, I commend Hochberg for standing up for such an important and underappreciated facet of our lives.