Trade Is Not a Four-Letter Word: How Six Everyday Products Make the Case for Trade

by Fred P. Hochberg

From former Chairman and President of the Export-Import Bank of the United States Fred P. Hochberg comes an illuminating and engaging tutorial on the basics of modern trade.

Trade—the exchange that powers the world—allows us to sell what we produce at home and purchase what we don’t. In the age of globalization, trade has joined together more people than ever before, providing access to major new markets and countless new products that have revolutionized our lives.

However, for millions of people, global trade has become a popular target for blame and the frustrations of modern life. Much of the public only connects trade with unfathomable, high-level deals causing the fundamental principles to often seem inaccessible and confusing.

Through the lens of six quintessential American goods, Fred P. Hochberg breaks down colorful and compelling real-world examples to dispel the widespread myths and confusions surrounding trade. By using six widely consumed American goods—the taco salad, the minivan, the banana, the iPhone, the college degree, and the HBO series Game of Thrones—Hochberg highlights the story of America’s most surprising trade relationships while sharing the essentials of trade that everyone should know.

Genres: Economics, Business, Nonfiction, Politics, Audiobook, Political Science, History

336 pages, Hardcover

Published January 14, 2020

Reviews

[Clif Hostetler · Rating 3 out of 5]

Ever since I took a college economics course I've been a supporter of free trade (i.e. tariff free). I was shown hypothetical models in that college class proving mathematically that all nations benefit in an environment of free trade.

This opinion on my part is problematic because many of my friends and acquaintances, both progressives and conservatives, tend to be critical of free trade. When I saw this book's title I knew I needed to read it and shore up my knowledge of the subject.

As hinted by this book's title the author is in favor of free trade—it's virtually impossible to be knowledgeable of economic theory and not be pro free trade. However, the book is not blind to the arguments against free trade. The author admits that there are always winners and loser from any kind of change including economic changes, but progress can't happen without change.

The book starts out with a quick history of American economic trade with other nations. This history consists of a sequence of "arch nemeses." In chronological order they were Great Britain, ourselves (i.e. hiding behind high tariffs), Soviet Union, Japan, and now China. Prior to the 16th Amendment the main source of income to the U.S. Federal treasury was tariffs. Needless to say that was an impediment to free trade for many years. After W.W.II the General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization (WTO) facilitated increases in fair trade and reduction of tariff barriers.

In a chapter titled "Giant Sucking Sound" the book reviews the history of the North American Free Trade Agreement (NAFTA)—now known as the United States, Mexican, and Canada Agreement (USMCA).

At the time that NAFTA was signed, there were a number of good strategic reasons for its passage that would prove beneficial to America and Americans over the long run. Realizing those benefits would hurt factory workers in many communities, we did not allow ourselves to be honest about the deal we were making—we glossed over the losses, and, later, turned around and pointed fingers. We could have done better, and we should have.

Next the book has a chapter addressing various economic myths. I've selected short excerpts that summarize the book's position regarding the myth. However, some of the best illustrations of the myths not being true occur in the examples given later in the book.

Myth #1: China Is Always a Villain When It Comes to Trade

... the reality is that America has intentionally ceded ground under his [Trump's] watch. Leaving the Trans-Pacific Partnership is the clearest demonstration of how America has walked away from a leadership role in global trade—we have abandoned our historic role of writing the rules of the road. … Globally, everyone agrees that we want China to be a better actor, engaging in trade in ways that are more consistent with other industrialized nations. Up to now, the U.S. has done this in partnership with allies, and has provided leadership to guide the way. Under Donald Trump, the preference has been for America to go it alone (without pesky allies who might muddy things up) by using tariffs rather than joint action as the chief tool for influencing China.

Myth #2: Bilateral Trade Deficits Matter

But a trade deficit is something else entirely: it simply describes the difference between the value of goods and services a country imports and the value of the things that it exports. Importing more from a given country than we export to it is not a measure of strength, weakness, solvency, fiscal irresponsibility, or anything else—nor is our money "lost" when we do so.
In a world where services such as software, movies, television, music, banking, insurance, transportation, and education are becoming much more strategically valuable to economic growth than the number of goods we can produce in a factory, a trade deficit on physical goods simply shouldn't bother us.

Myth #3: Tariffs Are Paid by Foreigners

Tariffs, by their very definition, are a sales tax that a country imposes on its own consumers and importers for buying foreign goods—when the U.S. creates them, they get paid by U.S. citizens to the U.S. government, full stop. There's no debating this point; it's just a fact.

Myth #4: Trade Agreements Are All About Jobs

As economies—and, especially, America's economy—have evolved to center more around services than physical goods, businesses in fields ranging from finance and law to marketing and entertainment have set their eyes on the vast majority of potential customers who happen to live beyond their own national borders. Because the rules of trade were largely written during eras when services were little more than a blip on the economic radar, a major goal of new trade agreements like TPP is opening the same doors to consultants, cloud service providers, IT support, and engineers that we've already opened to steel mills and lumberyards.

Myth #5: Trade Wars Work

I am pleased to report that trade wars are nowhere near as devastating as actual wars. That isn't to say that they don't also have victims, though—on the contrary, the major difference between trade wars and actual wars is that trade wars typically don't have winners.

Myth #6: The Less We Import, the Better Off We Are

An America that makes everything at home would be a land of $10 bananas, $100 shirts, and a diet limited by what's available season to season. You wouldn't have an iPhone to distract you or a laptop to stream TV.

Myth #7: Trade Is Win-Win

... that even the best intentioned deals are always going to leave somebody behind.

Myth #8: Everything Donald Trump Says About Trade Is Wrong:

By and large, globalization has helped three categories of people: rich people in rich countries, rich people in poor countries, and poor people in poor countries. What we have not done well is make globalization a winning proposition for poor people in rich countries. … President Trump is right about the impact trade has had on many segments of our population as well as lower-income workers in developed countries around the world

The rest of the book examines six products that make the case for free trade. These products are; (1) taco salad, (2) Honda Odyssey, (3) banana, (4) iPhone, (5) college degree, and (6) HBO series Game of Thrones.

Behind these six items are meaningful stories that help explain not only how trade has shaped our lives so far, but also how we can use trade to build a better future for our own families, for America, and for the world.

In case you're wondering why the Honda Odyssey is a product of worthy note, a 2018 analysis of part origins and assembly locations showed that the Honda Odyssey was the most American car—i.e. had the highest "made-in-America" rating. (The definition of "American" in this analysis performed by the National Highway Transportation Safety Administration [NHTSA] combines Canadian and USA origins because it's too difficult to separate those two.)

[Indra Nooyi]

Trade Is Not a Four-Letter Word is a clear-eyed, informative defense of the importance of free trade. If you’ve ever wondered what makes it possible to enjoy all the products that make daily life possible, this book is for you. And if you haven’t thought about trade, this engaging book will make trade a fascinating subject, one that you never knew you were interested in.

[JS · Rating 4 out of 5]

Deer blind read 2022: #2

This was a good book. If he cut it in half I’d say it should be required reading for high school civics. A few gripes are 1) the author got rich from trade, so it’s like a king writing a book about the greatness of monarchy, and 2) the thing free trade absolutists (like me) often screw up is the tone taken when discussing losing jobs due to trace. This guy tried, but it didn’t feel genuine.

Otherwise, a very good, but overly long book

[Jeff · Rating 4 out of 5]

Enlightening. Read This Book Before Voting. In this book, the most recent former Chairman of the Export-Import Bank of the United States of America - the person who led the organization prior to the current Acting President - explains what trade is and why it is good for America in a mostly objective fashion. In his recommendations for future action, particularly in the last couple of chapters, he gets a bit blatantly partisan and thus lost a star (and arguably could have lost another one - it gets that blatant at times). But beyond that particular part of the book this is a genuinely amazing and even shocking look at just how prevalent trade is in the modern American marketplace and just how much so many of our various - and not always obvious - systems and towns rely on it. For example, apparently 100% of US Penicillin - the main base component of all antibiotics I am personally aware of - comes from... China. Pretty well the entire US higher education system is dependent upon... foreign students paying full tuition. And despite being a "Chinese product", the Apple iPhone is only... 8% Chinese. So take the recommendations for future action with at least a fair amount of salt, but read the dang book - you need to know the basics here so that you can no longer be manipulated on this issue. Very much recommended.

This book publishes in January 2020 and I am writing this review on December 16, 2019. Obviously this is an Advance Review Copy. And while I hate having to say this because I treat *all* book reviews exactly the same, just so no one gets in trouble with any agencies let us be clear that this review is both freely given and my own uncoerced thoughts on the book.

[Dеnnis]

Way too U.S. centered. And the language. Trade for Dummies, anyone? Gave up.

[Bart Thanhauser · Rating 3 out of 5]

If you can’t gleam it from its title, this book isn’t a regular trade book, it’s a cool trade book.

In Trade Is Not A Four Letter Word, Hochberg, sets out to argue the benefits of trade -- a job that he feels politicians from across political spectrum have eschewed to our nation’s detriment. To Hochberg, the benefits of trade are obvious. Trade should be popular. Sure, it has shortcomings. But fundamentally, a globalized world has been to the benefit of most Americans, and if there’s no appetite from politicians to defend it, he’ll do it himself.

He has mixed success in achieving his goal. In the early chapters, Hochberg gives an overview of the history of U.S. trade policies, which I thought was useful. (I didn’t know that tariffs were the main source of federal revenue until the introduction of the income tax in the early twentieth century.) And the meat of the book looks at six products that would not exist, or that Americans would not have access to at low prices, without trade. These six chapters are fairly useful too. I thought the chapter on the iPhone was the best of the lot--a product only possible because of trade: American audio chips, Korean batteries, Congolese minerals, Japanese cameras, German accelerometers. And he has some interesting facts that support his general pro-trade argument. (A few that I liked: In 2018, the car that had the highest portion on American parts, labor, and assembly was the Honda Odyssey. The largest U.S. auto exporter by value for five years in a row is BMW. Despite being assembled at Foxconn factories in China, for each $1,000 iPhone, only ~$8.46 goes to China.)

Unfortunately, even in the more interesting chapters, Hochberg writes with a humor that is painfully bad. To call it dad humor does a disservice to dad humor. It adds nothing to the text and seems destined to put off more readers than it could possibly attract. And the format of the book is needlessly kitschy. Hochberg has a chapter on the “eight myths” about trade. He clogs up the book with unnecessary graphics and screenshots of Trump tweets. Etc. etc. Hochberg believes the fundamental problem is that trade is not popular because the public doesn’t understand it. It’s a PR problem. A marketing issue. And thus his desire to make trade cool, fun. Call me snooty, but it feels infantilizing. Worse yet, he is wholly not up to the task. He makes trade as uncool and un-fun as you would expect from an older guy living in the Beltway. (All of this humor also seems to mask that Hochberg himself is no trade policy expert; just a casual fan of the Washington Consensus.)

But a bigger problem than his inability to make trade cool, is his fundamental misdiagnosis of the issue. The public isn’t skeptical about trade solely because they misunderstand it or because politicians are weak-willed. The challenges to trade aren’t simply in the wrapping. There are reasonable critiques of trade from the left and right, and by giving a hokey, trade-is-for-dummies defense of it, he does a disservice to his goal.

Hochberg also conflates and makes a few dubious claims that further undermine his goal. For instance, he seems to conflate trade as a general thing (which most people are for) and the unending march towards greater liberalization of the past half century. Sure, trade in general, is good. Virtually no one would argue for autarky. But that doesn’t mean, as Hochberg writes, that “tariffs are on their way to becoming a relic of a simpler time.” (178) And although, liberalization can lead to lower consumer prices, Hochberg seems to overvalue how much Americans will care about saving a few bucks on consumer goods. Hochberg regards tariffs as unnecessary taxes and has the sort of disdain for them that seems more appropriate for a member of the GOP than a former Clinton and Obama administration official.

Worst of all are the final two chapters of the book. In these chapters, Hochberg tries to look forward and to address the shortcomings of trade. He does not succeed. His ideas range from teach-miners-how-to-code to make the government’s interagency process stronger to make sure our society “maximizes adaptability.” There’s a sort of lazy arrogance that shrouds all of these superficial ideas.

It’s difficult to defend free trade. Trade is divisive because the benefits, significant though they may be, are diffuse, and the pains are acute. But Hochberg is right to try to defend it. It’s just disappointing that he falls short of his goal.

2.5/5

[Nicole Gauvreau · Rating 4 out of 5]

I'll get a few things out of the way:
1) I read this book because I'm already in favour of free trade and would like to see it increase
2) the author is indeed not an economist, as other reviewers have pointed out (I think this is actually helpful for the book he's writing)
3) This is a book about US trade and only about US trade (though I would make the argument that the Game of Throne chapter could quite easily have been made into a chapter about the benefits of the EU).
4) The author has been a political appointee in past Democratic administrations, so yes, he's partisan.
Now, on to the review.

For what it's supposed to be (a pop text about trade), this book is very good. It's fun to read and covers a lot of ground, from US trade and tariff history, to modern products that show why trade to good (and that we need it), to things we could do to make trade hurt people less. I'd never heard of the TAA before, so that was something.
However, this book did at times (mostly in the chapters on products that "make the case for trade") meander off course and talk about too many other things.
This book is also, at 11 months after publication, out of date (and I now feel bad for recommending that my local library buy it). It focuses quite heavily on the policies of the Trump administration, and as I type this on November 10, 2020, it will need a new edition for (a likely similarly trade phobic, but less tariff happy), Biden administration. Oh, and a global pandemic has seized us and cause unexpected impact to the global markets and supply chains since this was published.
My final criticism is that the authors believes U.S. values have to become the global standard, and says so many times, and this includes over established and more strict EU values and regulations on the likes of data privacy.

[Kevin · Rating 5 out of 5]

A must read book to understand trade. For sure, the author is bias and is arguing for free trade and globalization. As a person working in the logistics field, my job is affected by trade and I am also a licensed customs broker. I may be bias also, but I think this is a fabulous book for anyone interested in learning about trade and correcting many misconceptions that the layman might have.

The six products that Fred Hochberg goes over is the most interesting in the book but the first five chapters are also interesting. His arguments are sound is worth while to read it. He briefly talks about AI and "new tech" but if there were no free trade, we will still be living in the stone age. Trade is the very old problem and a problem that will never fade away, so why not pick up this book and learn. Learn why trade is such misunderstood topic.

The author's argument that trade "quietly connects us, warms us, and draws us closer to the rest of the human race" , really makes sense. It is the first point of contact with other countries. There's no need for animosity and bitterness. Global citizenship should be the goal for everyone and only then can the human race become one.

[LJ Lombos · Rating 4 out of 5]

While the book is not shy of calling for greater economic integration, Hochberg made a clear and evenhanded assessment of the benefits and perils of free trade and the wider discourse of globalization. Hochberg did a great service better informing the readers on how trade policy works by stripping away some of the common myths and false notions surrounding it using six products as illustrations. There are merits on his policy recommendations on how the United States can become more competitive against the nativist backlash towards anything associated with “free” and “trade”. However, I find some of them as blue-sky aspirations since it would take an incredible dose of political courage and humility for policymakers to have an honest conversation with those who would most likely lose out from trade policies. Nevertheless, Hochberg’s book brings the trade conversation at the forefront of political discussions at a time when faith in free-market economics is eroding.

[Shivakumar Srinivasan · Rating 4 out of 5]

A great read and an overview on the history of American Trade policy and how it has shaped up America and its economic dominance. It also talks about the role trade has played in the development of societies and bursts some of the widely believed myths that abound Trade Policies and its impact on the economy and society. Written by a former head of the US EXIM, it also provides a prescription on how America via trade can adopt a policy for the future that can help it retain its global dominance. A prescription that can be seen clearly as anti trump, but also be viewed as more free market and more government support for a freer and liberal open trade policies.
Written is a non academic style, and loaded with amazing amount of facts and trivia, this book is highly recommended for those that want a deeper understanding of Trade and Trade policies.

[Hemanth N · Rating 3 out of 5]

The book is very well written to explain various perspectives of trade. The author states that trade can’t create all winners, it would have some winners and some losers. He explains how NAFTA started and how much it has changed things around us. What was TPP and what benefit it would have added, if Us would have joined it. Explain concept of through out the year availability of mangoes, avocados, tomatoes. How imported cars changes perspective of cars, how assembly line of apple crosses 6 continents , how bananas were grown by Latin American countries to cater to demand of US. The creation of American education systems and its global impact, American Tv shows such as game of thrones. Overall decent book to read to understand trade policy and how we all need to think to elect our leaders.

[3RiCk65 Espinoza · Rating 3 out of 5]

This book shows how trade can be a more complex issue as our global trade network has allowed us to enjoy products from all over the world. Makes a good point on why free trade is good for the united states and the rest of the world. We have been able to enjoy the benefits of over consumption in the United States. Free trade and the global trade network was able to give us that opportunity. This book shows how there is no such things as an "American made" product or company. Companies will follow what needs to be done to remain affordable in such a competitive marketplace. I did not enjoy the politics of this book as you can clearly see the bias of the author and their political beliefs. While politics do unfortunately play a role in trade and the economy, I would of enjoyed a less biased view.

[Jeffrey Manners · Rating 4 out of 5]

This books provides an excellent overview of the history of trade, trade politics and policy in the United States. The author presents a balanced, strong and convincing case for the overall benefits of trade. He addresses the downsides of trade while proposing remedies for these.
Although I have a university degree in economics, I believe this book is highly readable and accessible to the general reader. No prior knowledge of economics should be required.
Although the book was written in 2020, it is still highly relevant.
The only shortcoming is that the author should have addressed the charges of extensive unfair trade practices leveled by the Trump administration. Granted some of the US's trading partner do engage in unfair trading practices. These should have been identified and their impact assessed.

[Sudarshan · Rating 4 out of 5]

An insightful read on the pivotal role trade plays in our economic existence. The case-studies that the author uses to drive that point are eye-opening, although I am sure that we all have been somewhat aware of them already, iPhone isn't made in China, it's varied components are sourced from all over the world etc.
The author also goes an inch-deep into what modern trade agreements are about, news flash they aren't about lowering tariffs, instead they are about promoting one standard or lowering artificial trade barriers.
I got the recommendation from FT book reviews on Economics. Highly recommend reading this.

[Ana Brangioni · Rating 3 out of 5]

Read this book for a International Political Economy class and was pleasantly surprised. Trade policies and the economic rivalry between the United States and China are not my favorite subjects to read about, but Hochberg managed to make it tolerable. His analysis is crucial to anyone looking to build a knowledge foundation on trade and economic globalization that is realistic, but overall optimistic.

I also have deep strong feelings about Donald Trump and his ability to spread misinformation on social media — and obviously his capability to rise on lies — but I believe the author’s sentiment about Trump’s figure and decisions were overplayed.

[Catherine Lataillade · Rating 3 out of 5]

In this reader's theory and facts, about trade as an easier transition than yesterday; I believe the most focused trade is a reading adventure. Like education which last longer.
Trade is also commercially designed. Such as China and the World trade Organization (WTO). China's activities are well known in trade economic leveling. And entering into a world of digital commerce production. Like manufacturing.
One such production, like the karaoke microphone, is made in China by Tzumi.
See this production at, www.popsolo.com, www.facebook.com/clataillade1

[Iván · Rating 4 out of 5]

Un interesante libro sobre Comercio Internacional. Con la mirada de un alto funcionario de EEUU, pero muy bien explicado y argumentado. Hay diversas partes diferenciadas, en una de ellas expone partes claves del comercio y acuerdos como el NAFTA y las relaciones económicas entrre EEUU y otros países como Canadá, México, Japón o China. En la otra parte nos expone y explica el comercio a fravés de seis ejemplos de productos: 1) Taco Salad 2) Honda Odissey 3) Bananas 4) iPhone 5) The College Degree 6) Game of Thrones. Muy didáctico y agradable de leer.

[Jazz Lewis · Rating 4 out of 5]

This book provides an excellent overview of the concept of trade - what it was, what it is, and what it could be if used effectively. I appreciate the recommendations on how to reform our current trade system to make it more effective. However, I still feel that there should be more emphasis on communicating the value of trade to everyday citizens, showing them how they will benefit from it, other than facing higher prices if we try to correct certain trade relationships. Overall, it's a great book and worth reading.

[LaanSiBB]

I don't mind reading a right-wing book that tells me how trading works, I also don't mind reading an American-centric book that tries to persuade. But is this the only reality we have to live on? The US Dollar hegemony has no intention in improving world inequality and the structure of the global division of labour. And it's very naive to neglect how tech companies are becoming the host of the American economy, you simply don't have to be a technocrat to understand their impact.

[Kyle · Rating 4 out of 5]

3.5

So the book gets less interesting as it goes. I really like the introduction and the usage of the first 5 products, but got barely gets used in its chapter, and the ending was just okay.

My biggest issue is that the 6 products are the star of the cover of the book, but are not nearly enough of the actual book.

That being said, as a learning resource this was super helpful and I’m glad I read it.

[Dean · Rating 5 out of 5]

I very rarely give any book five stars. Have to do so here because Fred Hochberg sits his mark for his book and then hits that mark.

I fear that maybe they only readers will be those like me who already agree with that free trade is a net positive for all participants. Even in that is the case give proponents more intellectual ammunition in making our argument.

[Alven Yee · Rating 4 out of 5]

Clear arguments for trade and why the pros outweigh the cons. Trade is the reason why we enjoy lower cost of goods and even fruits that were once only available seasonally. A little too US centric but speaks in volume why US should embrace trade rather than shun it and use it to benefit the world as much as itself.

[Lisa Hunt · Rating 4 out of 5]

Another economics book - somebody help me! Anyhow, I liked this one, it was easy to follow. Sometimes it got bogged down a bit, for me, but for the most part it was easy to understand. I liked the six chapters in the middle that dealt with specific "products" and how trade was involved with each of them. Definitely gave me a better understanding of how it all works!

[Bernard · Rating 3 out of 5]

I understand the benefit of trade from economic 101. Somehow the issue nowadays is bigger as it involves the people. From the academias perspective, it’s very cold, as if the number is not related to the persons.

The book is a good reminder about how trade influence the world, but not an operating model for the real world we are in now

[William Milks · Rating 4 out of 5]

Excellent exposition of the importance and benefits of global/international trade in our lives.

Author is witty, on-point, and interesting.

Should be required reading for all voters. Gonna seriously consider this book an assignment for my history students at some point.

[Elizabeth]

DNF

Good narrative style and interesting insight into the nuances of global trade. Not super gripping though, got halfway through and then gave up trying to finish it after hitting the library renewal limit.

[Steve Wilburn · Rating 5 out of 5]

I am involved in exporting MicroGrid energy production equipment. Fred’s book is very informative and helps us understand the exporting biz. Great job Fred.

[Bill · Rating 4 out of 5]

Definitely worth your time

[Steven Peake · Rating 4 out of 5]

Not a bad book for everyone to read

[Liz · Rating 5 out of 5]

Lots of great information with a good sense of humor that makes this an easy to read and easy to understand point of view.