Behind President Trump’s decision to strike some of the largest American trade partners with rigorous prices, it is its fixing on the trade deficit that the United States takes place with other nations. But many economists say it is a bad metric to judge the quality of a commercial relationship.
The steep prices, which entered into force on nearly 60 trade partners on Wednesday, were calculated on the basis of bilateral trade deficits, or the gap between what the United States sells to each country and what it buys.
Trump has long considered that the gap is proof that America is “scammed” by other countries. He maintains that the unjust behavior of other countries has rendered trade so biased and that the United States must be able to manufacture more of what it consumes. But economists argue that it is a mistaken way of approaching the question, since bilateral trade deficits arise for many reasons beyond unfair practices.
“It’s completely silly,” said Dani Rodrik, an economist who studies globalization at Harvard University, about the accent put by Trump on bilateral deficits. “There is no other way to say it, it makes no sense.”
Some economists agree with the Trump administration that America’s overall trade deficit with the rest of the world reflects a problem for the American economy, because the United States depends so much on manufacturing elsewhere, including in China. But others do not see it as a problem. And almost all economists say that focusing on the imbalances from one country to another can be very misleading.
Last year, for example, the United States led bilateral commercial surpluses with 116 countries worldwide. He has executed bilateral commercial deficits with 114 countries, according to the World Bank data.
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