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None of Trump’s Business

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Here’s a letter to the Wall Street Journal:

Editor:

You make several important points in “Why Vietnam Loves Donald Trump [2]” (July 11). Yet you there keep implicit one point that should be made explicit – namely, Pres. Trump’s trade policies are the opposite of those that would be pursued by someone with excellent business acumen.

For example, a good business executive understands that when a company sources inputs from abroad it does so not haphazardly but because those foreign sources are less costly than are domestic sources. This executive therefore also understands that disruptions caused by tariffs to a company’s global supply chain are very costly. And so unlike Mr. Trump, no skilled business person would blithely tell Apple that moving more of its operations to the U.S. to reduce the impact of these disruptions is an “easy solution.”

And then there’s Pres. Trump’s obsession with bilateral trade deficits. Every successful business runs continuous, and ever-growing, ‘trade deficits’ with each of its suppliers. A business that insisted on having no such ‘deficit’ with any of its suppliers would cast itself quickly into bankruptcy. Mr. Trump’s incessant inveighing against America’s trade deficit with China reveals that he is unaware of this basic reality.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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