RECOMMENDED READING
Behind President Donald Trump’s decision to hit some of America’s largest trading partners with stiff tariffs is his fixation on the trade deficit that the United States runs with other nations. But many economists say that is a poor metric for judging the quality of a trade relationship.
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“Because the global economy is now so integrated, countries have been able to move goods through third counties to get into our market,” said Mark DiPlacido, a policy adviser at American Compass, a conservative economic think tank. As the US bilateral trade deficit with China has decreased, the deficit with other Southeast Asian countries has increased, he said.
“So it’s not enough to just target China anymore,” he said. “There just needs to be this global baseline if we’re going to see the overall trade deficit decrease.”
Recommended Reading
The Need for Tariffs
The country’s deficits with China are so immense that new thinking—and hefty tariffs—are required, says the first US trade representative under Donald Trump.
Fiscal Conservatives Should Care About Trade Deficits
Fiscal conservatives need to care about trade deficits, not just budget deficits, when it comes to sound economic policy.
Why Trump Is Right About Tariffs
Taxing imported goods is unpopular with economists, but it could help the U.S. lower the trade deficit, strengthen its industrial base and safeguard national security.
