Mr. Donald Trump
1600 Pennsylvania Ave., NW
Washington, DC 20500
Reports are that, in your telephone conversation today with Chinese President Xi Jinping, you complained that Americans’ trade deficit with the Chinese is growing.
Why are you complaining? Do you not realize that a rising U.S. trade deficit means that foreigners are increasing their investments in the United States? If you do realize this reality, why do you reckon that for us Americans it is bad? Do believe that the Joneses in Jacksonville and the Smiths in Saginaw are damaged if you increase your investments in America? If not, why do you suppose that these Americans are damaged when non-Americans increase their investments in America?
You famously strut and boast that you’re committed to “making America great again.” Yet when foreigners invest more here – investments that both likely signal increased global confidence in the U.S. economy and that add to the capital stock of the U.S. economy (thus raising the productivity of American workers) – you complain. Your actions make no sense.
If you’re really committed to enhancing America’s greatness, you should stop complaining to the heads of foreign governments about their citizens’ investments in the U.S. (that is, about their citizens’ contributions to the so-called U.S. ‘trade deficit’) and instead send flowers, chocolates, and notes gushing with thank-yous for their helping to achieve on your watch the American ‘greatness’ that you claim to want.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030