This morning – upon announcing his threat to increase tariffs on imports from the EU punitive taxes on Americans who buy goods from Europe – Trump tweeted this:
Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable. Our discussions with them are going nowhere!
Sigh.
Trump’s belief that the concept of a U.S. trade deficit with an individual country or particular region of the world is economically meaningful is proof positive of his deep economic ignorance – an ignorance that would be hilarious if it weren’t motiving its politically powerful possessor to inflict huge damage on his fellow citizens and the world economy.
Although the example that I’m about to give is an old saw among economists, it’s worthwhile repeating: If you fall for Trump’s argument – if you think that his argument here deserves credit – if you cannot see that it is completely and unsalvagably bonkers – then you should stop trading with your dentist and your supermarket because you have large and growing trade deficits with each. In Trump-world, they are ripping you off!
Or rather, you have large and growing trade deficits with your dentist and supermarket assuming that you are not employed by your dentist and your supermarket – in which case, they have large and growing trade deficits with you and you are ripping them off. In Trump-world, they should fire you!
If even one-tenth of the ignorance that Trump displays about economics were displayed by a Democrat or a ‘progressive’ pundit, Trump fans would be the first to (rightly) criticize that Democrat or ‘progressive’ for his or her inexcusable ignorance. Yet with Trump, Trump fans allow themselves – sometimes even proudly – to be duped into excusing his lunatic trade policies.
