If another person starts banging their fist in your face, you do not magically become better if you start banging your fist in their face. In the short run your hand will hurt and it won't make your face better, but in the long run it might prevent them from continuing to bang their fist into your face.
Similarly, in the short run, cutting off china will hurt economically (both our people and theirs). In the long run, if it causes them to open up, it will probably benefit us and their people (though not necessarily their leadership).
That plan (opening up society by economic isolation) didn't work particularly well for Cuba, Iran, North Korea, or any other embargoed country that I know of.
"[And] as Frederic Bastiat put it, it makes no more sense to be protectionist because other countries have tariffs than it would to block up our harbors because other countries have rocky coasts."
That's an excellent equilibrium analysis, and I completely agree with it. In the short run, treating protectionism as constant, retaliatory trade restrictions will harm the US as well as China.
The only flaw in that reasoning is that it treats tariffs as being unchangeable. China and other countries have eliminated protectionist policies in response to retaliation. As far as I know, no coast has even become less rocky in response to a blockaded harbor.
Embargos are a (light-weight) act of war. And like most acts of war, they hurt the civilian population more than they hurt the leadership.
Protectionist trade policies to attempt to balance a huge trade deficit is just economic policy. Free trade is all well and good when both partners are trading freely, but China is not doing that. China uses forced-low labor costs, low quality standards, low environmental standards, and import quotas to ensure they come out way ahead on the balance of trade. This hurts US businesses who can't compete with Chinese companies prices because they have to adhere to much higher standards/costs.
Simply adding tariffs to Chinese imports wouldn't be enough though; while that would bring some money into the US budget, it probably wouldn't help US businesses start up to pick up the slack in imports, and US consumers would wind up footing the bill. We'd also need a reduction in taxes on businesses that produce the sort of products we import from China so we can kickstart US production. The lower taxes should lead to more US jobs and lower prices on the products, and the government shouldn't lose revenue because it'll be getting the extra tariff money. (It'll be a long time before US businesses can produce the volume of goods we import from China, even with tariffs and tax breaks in place.)
> Free trade is all well and good when both partners are trading freely, but China is not doing that.
There's no need for the other partner to trade freely to make free trade from your side advantageous to you. Have you heard of the theory of comparative advantage (http://en.wikipedia.org/wiki/Comparative_advantage) that explains why this works?
"The fundamental logic of free trade can be stated a number of different ways, but one particularly useful version - the one that James Mill stated even before Ricardo - is to say that international trade is really just a production technique, a way to produce importables indirectly by first producing exportables, then exchanging them. There will be gains to be had from this technique as long as world relative prices differ from domestic opportunity costs - regardless of the source of that difference. That is, it does not matter from the point of view of the national gains from trade whether other countries have different relative prices because they have different resources, different technologies, different tastes, different labor laws, or different environmental standards. All that matters is that they be different - then we can gain from trading with them." (http://web.mit.edu/krugman/www/negot.html)
Did you read the Criticism section of the wikipedia article, which describes how the theory doesn't apply if capital flows freely (as it does) and that even when it did apply it created uneven distribution of wealth which have caused countries like China to enact policies to ensure that Comparative Advantage does not apply?
At issue here is that we're not trading goods we're good at producing for goods China is good at producing. Instead, we're trading the future earnings of US citizens for Chinese goods. That might have been ok when our debt was low and the goods were low-value, but now our debt is unsustainable and the goods are high technology which we invented and used to produce, but don't anymore. The theory was that we were becoming a 'service economy', but the Chinese don't want or need our services. We have nothing to trade with them except our future financial independence... and the future is coming very quickly.
Cuba and Iran are only isolated from the US, and the US was never a major part of their foreign trade. North Korea only survives because it is propped up by external powers (China, and to a lesser extend, South Korea).
In contrast, China makes many consumer electronics intended for the US market.
International isolation worked fairly well for South Africa. Threads of isolation also opened up the Japanese and Chinese markets to US-made auto parts, and it opened the domestic Chinese consumer electronics market to foreign-made semiconductors.
> International isolation worked fairly well for South Africa.
Not really. South Africa's main exports were mainly commodities and anything it imported it imported through proxies (such as Taiwan or Israel). Disinvestment was a major boon to South Africans since it allowed them to buy foreign assets at cents to the rand.
Sanctions also increased the Laager mentality which probability increased the length of Apartheid.
The reasons why South Africa turned to CODESA had probably more to do with the happenings in the Soviet Union and Eastern Europe (since South Africa’s biggest problem was that the ANC&SACP movements were funded by the USSR).
Btw, I don’t know why you say that it worked, when by all objective measures black people are worse off now than under Apartheid (e.g. a 13 year drop in life expectancy). South Africa is on track to become a failed state in 10-15 years.
Think on the bright side: if the US economy can survive this kind of one-sided trade it can survive anything... The same can't be said of other economies.
Similarly, in the short run, cutting off china will hurt economically (both our people and theirs). In the long run, if it causes them to open up, it will probably benefit us and their people (though not necessarily their leadership).