Here’s the latest in my on-going correspondence with Nolan McKinney, a fervent fan of Trump’s trade policies:
Yes, I saw that the Trump administration, in an effort to reduce America’s trade deficit with China, seems to have persuaded Beijing to arrange for the Chinese people to buy more American exports. But no, I neither regard this outcome as a “victory for America” nor “thank” Trump for arranging it.
You’ll pardon my repetition, but regardless of what you think of the U.S. trade deficit with the rest of the world, it’s absurd for you or anyone else to find meaning in the U.S. trade deficit with China, which is one among nearly two hundred nations with which Americans trade. Bilateral trade deficits and surpluses in a world of more than two countries are completely and unsalvageably meaningless. Therefore, it is foolish for the administration to base policy on these meaningless statistical artifacts.
In effect, Trump – in his ignorant effort to reduce America’s trade deficit with China – threatens to obstruct Americans’ purchases from China unless and until the Chinese buy more from Americans. I no more “thank” Trump for this effort than I would thank him were he – in an equally ignorant effort – to attempt to reduce my trade deficit with Home Depot by obstructing my purchases from that retailer until and unless Home Depot buys more from me. Indeed, just as I would summon the police to protect myself from such officious and destructive meddling in the latter case, I wish that I could summon the police to protect myself, and other Americans, from such officious and destructive meddling in the former case.
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