Scott Sumner offers an important clarification to discussions of so-called “currency manipulation,” and in the process joins in the criticism of a recent Treasury department document meant to justify Trump’s lunatic trade policy . A slice:
In fact, the US government policy is far worse than what one might infer from the previous discussion. The Treasury Department’s accusations of currency manipulation are based in part on the level of bilateral trade deficits, a concept almost universally regarded by economists (including Bergsten and Gagnon) as being utterly meaningless. It’s hard to overstate the craziness of implementing US policy that is aimed at harming other countries and that is based on the economic equivalent of astrology.
There will be no new tariffs against Mexico, for now. However, the hiatus might only be temporary. “The tariff threat is not gone,” one Trump administration official (who is probably Peter Navarro ) told  the New York Times. “It’s suspended.”
And that raises a serious problem for businesses on both sides of the border. Can or should they continue to make deals and investments, or should they look for other markets? This regime uncertainty  can be as costly as tariffs themselves.
Even stranger, there was no relationship between the stated problem (a migrant crisis and a drug problem in Mexico) and the proposed solution (taxing Americans). Even more bizarre, taxing Americans for buying goods will harm economic health in both countries, which will likely intensify problems at the border.
Like many Republicans in the Trump era, Carlson has been trending away from limited-government rhetoric for a while, using his show to “yammer on” about why tariffs are good while still fearmongering about liberals and “socialists” (a category very broadly defined in the Fox world). But drape that “socialism” in a flag, and you just might win him over.