Opinion: Trump failed by his own trade metric. Pursue it further, and we’re doomed.
By Robert J. Samuelson Robert J. Samuelson Columnist focusing on economics Bio Columnist March 10 at 6:34 PM If nothing else, the latest U.S. trade deficit — $621 billion in 2018 for goods and services — should give President Trump a lesson in the economics of trade. Trump has insisted that a successful policy requires a trade surplus and the absence of a deficit . That’s wrong, as many economists have argued. The economists are right.
If that were true, then the rising trade deficit would have caused a sharp decline in jobs and, possibly, even triggered a recession. We all know this hasn’t happened, in part because Trump keeps reminding us of all the jobs created on his watch. That would be 4.9 million from January 2017 to January 2019.
Presto, there’s the formula for persistent trade deficits. We provide a service to the world economy — the dollar’s global role — and other countries repay us by sending us imports. But these effects are not shown in the official statistics. If they were, the U.S. deficit would shrink or become a surplus.
Second, although unfair business practices aren’t yet the main cause of trade deficits, the Trump administration is right to object loudly to the special treatment that China gives its cutting-edge industries. These measures include subsidies, intellectual-property theft and the coercion of foreign companies to participate in joint ventures with Chinese partners.
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