… is from page 81 of Eamonn Butler’s excellent 2021 book, An Introduction to Trade & Globalisation:
Because a country’s balance of payments with the world is the result of so many different factors and may be perfectly benign, the mere existence of a deficit is a bad excuse for protectionism. A country’s deficit with any single other country is an even worse excuse – though politicians use it often. US President Donald Trump, for example, cited his country’s trade deficits with China and Mexico as reasons to renegotiate deals and raise import barriers.
DBx: Indeed so.
Take the following to the bank: Anyone who talks about one country’s trade deficit or trade surplus with another country or region as if that “deficit” or “surplus” has even the slightest relevance for policy, or as if that “deficit” or “surplus” signifies a problem or a boon, is someone who is either utterly ignorant of the economics of trade, or is someone who assumes that you, the audience, is utterly ignorant of the economics of trade. Either way, such a someone isn’t to be trusted to comment on, and much less to have power over, trade policy.
