If Trump’s bottomless ignorance of trade weren’t so economically harmful, it would be comical.
Editor, BusinessDay
Editor:
You report that “Donald Trump on Tuesday offered a series of incentives to encourage foreign companies to relocate to the US” (“Trump offers incentives to firms relocating to US,” Sept. 24).
Is this the same Donald Trump who bewails U.S. trade deficits? If so, someone should inform him that the more foreigners invest in the U.S. the stronger are the forces that cause U.S. trade deficits to increase. Foreigners need dollars to invest here, dollars that they earn when Americans import their goods. And every dollar that foreigners invest in America is a dollar that foreigners do not spend on American exports – that is, a dollar that foreigners use in a way that swells U.S. trade deficits.
Only Trump’s deep ignorance of the economics of international trade allows him to routinely broadcast his aversion to U.S. trade deficits while he also boasts of his schemes to encourage more foreign investment in the U.S.
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
