Really not quite grasping the economic basics here

Jonathan Reynolds, Labour’s shadow business secretary, said the UK should be willing to apply “trade remedies” - tariffs - if it is found that Chinese brands have gained an unfair advantage over their European peers.

Asked about the issue at the MakeUK manufacturers conference on Tuesday, he said: “There are some sectors where I look at just the sheer overcapacity that’s coming out of China and I worry that is inconsistent with how a healthy, global market economy should operate.

“Where there is a concern that we’re not facing free and fair and healthy competition, we’re right to use trade remedies as an answer to that.”

This is not just to dunk on the Shadow Secretary, we expect the current one to make much the same sorts of points. And all likely contenders too. Simply because politics just hasn’t - 248 years after it was first properly pointed out in Wealth of Nations - caught up with how trade works. Nor, even, the most basic point about who the economy is supposed to work for.

The claim here is that the Chinese government has been taking money off Chinese citizens and giving it to Chinese car making companies. As a result those Chinese cars are subsidised and thus cheap to us Britons.

That is the claim. The next step is where the lunacy comes in, in the reaction. For now the claim is that we must tax ourselves for buying these cheap, subsidised, Chinese cars. That’s what a trade tariff is. So too would be any system of quotas or other restrictions upon those cheap cars being imported. It’s a tax upon us Britons.

Or, just to point up the lunacy, China is taxing its citizens so we must tax ourselves in response.

The entire point of trade is that we get to put our hands on the things made by Johnny Foreigner - those things that we desire of course, those which are cheaper, or better, or simply more desirable than we can make them ourselves. That’s not an aberration, that’s the point.

Even more basic, the point of an economy is consumption, not production. So, if someone’s offering cheap electric vehicles - however produced, however financed - the correct answer is “Please send a second shipload. Pretty Please”.

The Chinese government is, as a result of its actions, getting Chinese car companies to ship us cars. Each coming with a cheque attached signed by the Chinese taxpayer. We get the car and we get the free money. The political response is that this is dreadful and cannot be allowed.

Foreigners sending us free money is a bad idea that must be stopped. Now do you see why politics is such a lousy way to run the place?