Unfortunately, at some point this silly worry about trade deficits will take a real toll. Overall American imports might actually start going down. While Mr. Trump may see this fall in imports as a good thing, it really won’t be. Here’s the thing that most people, especially the president, fail to understand: if imports fall, so will exports. This counterintuitive reality is easily understood if one thinks of how foreigners acquire the dollars they need to buy U.S. goods.
The single biggest way to acquire dollars is to sell goods and services to Americans — goods and services that Americans import. We get valuable outputs from foreigners in exchange for little green bills. The fewer are the dollars that foreigners earn by selling their exports to us, the fewer are the dollars available to them to buy our exports.
As Adam Ozimek, an economist at Moody’s, aptly put it, “The Trump administration is learning you can’t tariff your way out of a trade deficit.” By the way, nor should anyone want to do so, because U.S. trade deficits are typically desirable rather than undesirable.
George Will both endorses efforts to reduce the U.S. President’s power to chant “national security” as a means of justifying punitive taxes on American buyers of imports, and rejects Trump’s assertion that the president can unilaterally pull the U.S. out of NAFTA. A slice:
The president might argue that he can unilaterally terminate treaties (although no president did so until 1927), and that congressional-executive agreements decisively resemble treaties because presidential initiative is paramount. However, the president’s power in foreign relations is plenary except regarding commerce, where the president has no independent power and where the Constitution’s commerce clause establishes Congress’s primacy. Presidents can make trade treaties that must be consented to by two-thirds of the Senate. But congressional-executive agreements such as NAFTA are authorized by statutes passed by both houses of Congress, and must be terminated by statutes.
I worry that the media tends to shrink vast regions, teeming with populations beyond human comprehension, down to a sort of anthropomorphized caricature—“The US”, “Japan”, “China”, etc. Then our foreign policy responds as if we were dealing with a single person, not a whole world of people. “What should we do with that bad guy?” No, it’s not that bad guy, it’s a bad guy named Xi Jinping and 1.4 billion other people, as many as the entire world had in 1870.