… if he is among the many protectionists (such as Donald Trump or Peter Navarro) who, finding meaning in bilateral trade accounts, detects danger for country A if country A has a trade deficit with country B, should also find danger for each private producer that has a trade deficit with another private producer. That is, if this protectionist were consistent in his views, the same reasoning that leads him to worry about America’s trade deficit with China should also lead him to worry about, say, The Trump Organization, Inc.’s trade deficit with each of its many suppliers, including with each of any janitors that The Trump Organization, Inc. has on its payroll or otherwise contracts to hire. (After all, I’m quite certain that no janitor hired by The Trump Organization, Inc., buys as much from The Trump Organization, Inc., and The Trump Organization, Inc., buys from any janitor.)
So why does the allegedly genius businessman who is now president of the United States – and whose many fans believe him to “tell it like it is” – not judge his own private company by the same standards that he so confidently insists are appropriate for judging Americans’ trade with non-Americans? After all, if China’s trade surplus with America really is evidence either of Chinese chicanery or of the incompetence of American leaders (or both), then it must also be true that a Trump Organization janitor’s trade surplus with The Trump Organization, Inc. is evidence either of that janitor’s chicanery or of the incompetence of Trump Organization leaders (or both).
Protectionists will protest that the comparison is inappropriate. But they will offer no sound explanation for the alleged inappropriateness of the comparison. If protectionists are correct that in a world of more than two countries trade between any pair of countries ‘should’ be balanced – and would be balanced in the absence of chicanery or incompetence – then I see no reason why in a world of more than two economic entities trade between any pair of entities ‘should’ not be balanced – and would not be balanced in the absence of chicanery or incompetence.
Of course, because in a world of more than two economic entities there is in reality absolutely no reason to expect that trade between any pair of such entities should or would be balanced, there is no reason to expect such balance for each pair of those many entries called “countries.” Yet many protectionists, including Trump and his Trumpetts, mysteriously are unable to grasp this simple truth. Trump and his Trumpetts continue to shriek and bellow and furiously flap their lips about the alleged dangers to Americans of America’s trade deficit with China – and, regrettably, many Americans fall for this display of astonishing economic ignorance.