Here’s a letter to the Wall Street Journal.
Editor:
Hopefully Donald Trump will read Joseph Sternberg’s column describing the economic doldrums inflicted on that continent by E.U. economic interventions (“Hurrah! Europe Is Fighting Over Economic Policy,” February 13). Should he do so, the president might rethink his assertion that the E.U. has been “screwing us” on trade – a faulty conclusion that Mr. Trump grounds on the fact that the E.U. has consistently run annual trade surpluses with the U.S.
To describe real per-capita GDP in the E.U. since 2009 as remaining flat would be generous; in 2025 it was slightly lower than it was 16 years earlier.* In the U.S., in contrast, real per-capita GDP rose over these same years by 32 percent. And yet in each of those years the U.S. ran a trade deficit with the E.U., as well as with the rest of the world, while the E.U., with the exception of 2022, ran a trade surplus with the rest of the world.
These data point to a reality that Mr. Trump stubbornly refuses to acknowledge – namely, a country or region runs trade deficits whenever it attracts more global capital than it repels, and it runs trade surpluses whenever it repels more capital than it attracts. The E.U. consistently runs trade surpluses, and the U.S. trade deficits, not because the E.U. is cheating or besting America at trade but, rather, because the E.U.’s growth-stifling policies are repellant to global investors while America’s more market-oriented policies are attractive to these investors.
Mr. Trump’s obsession with putting an end to U.S. trade deficits is an obsession with making America repellant to global investors and, hence, more like stagnant Europe.
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* The nominal per-capita GDP dollars were converted into real dollars using this GDP deflator.
