Here is my feeling about free trade. As a long time libertarian I have always preached the virtue of free trade. However there are some qualifications which make a rational arguement for tariffs if a true free market economy does not exist.
For example if a country used slave labor to reduce the cost of their products would it be considered okay to do business with them. Most would say no but from a strictly free trade point of view what's the difference? If they offer the product at a reduced price why should one care if it is the result of slavery.
Also what if a country seized a product from another country and sold it cheaply. Would it be OK to buy from them? After all the price is less, no matter if the product is stolen or not.
Most people would say that a country that practiced these forms of trade should not be dealt with. Libertarians also condemn such practices as "coercion" and might refuse to deal with them on moral grounds.
In the case of the US there is a tremendous amount of government "coercion" which creates the price levels that are uncompetitive. This control is practiced in many ways. For example salary levels are artificially inflated by minimum wage laws, laws that require union participation, etc. Futhermore infrastructure costs, such as water, sewer, electricity, roads, are all completey regulated by the government.
Thus the US businessman is not free to negotiate for low wages, he cannot shop around for cheaper water, or electricity. He is prohibited by government coercion from being able to create the conditions necessary for low cost product.
Therefore if it is immoral for one country to artificially decrease the costs of doing business by using slave labor or stealing from another country, isn't is also immoral for a country's government to INCREASE prices through coersive restriction of the free market processes. (Remember the important thing for a government is to make money for itself, not help local businesses)
How could a country attempt to negate the coercive practices of another country? They could ban the importation of that countries products, which is impractical if there are few sources for the product or they could add tariffs to the products to make them equal in price to the products of another less coercive producer.
Likewise tariffs or import taxes could also offset the higher business costs to business of heavily regulated countries like the US. So tariffs are can be considered a way of leveling the coercive practices of the US government.
One should easily see a flaw in this arguement since the tariffs would actually be going to the US government which is the reason for tariffs in the first place. But the only other option is for the government to continue to enrich itself at the cost of the businesses which are at the mercy of the bureacracy. This will eventually be disasterous for the government itself though the people will be the first to suffer for it.
In this situation there is no free market solution available due to the coercion practiced by all parties. Free trade is not possible and one can either choose to cling to the idea that trading with someone like China constitutes free trade or support more government intervention to attempt to level the playing field.
As in much of life there is no good solution.
