04/03/2017

Trump Is Completely Wrong On The Trade Deficit. Let Levin, Sowell, And Friedman Explain [Watch]

Chris Pandolfo, Conservative Review

Indeed, Trump’s first executive order is designed to find where the U.S. is experiencing trade deficits with foreign countries by requiring the Commerce Department submit “a report on trade practices that contribute to the trade deficit.” According to CNBC, that includes both U.S. government and foreign trade practices.

The second, meanwhile, is intended to catalog where the federal government is failing in its enforcement and collection of existing tariffs and duties.

President Donald Trump is expected to sign two executive orders on international trade today, consistent with his campaign promise of seeking “fair trade” for the U.S. In doing so, there will be several economic falsehoods perpetuated in defense of Trump’s tariff policy, most likely having to do with the notorious “trade deficit.”

The sort of protectionist tariffs Trump campaigned on are designed to lower the “trade deficit,” the supposed discrepancy in the number of goods America imports vs. the goods she exports. When America sells fewer products overseas and imports more foreign products, there is said to be a deficit.

"What's driving [the trade deficit] is that the U.S. has the lowest tariff rates and the lowest non-tariff barriers of any developed country. While other countries talk about free trade, they actually are far more protectionist than we are," Commerce Secretary Wilbur Ross said on Thursday.

But the trade deficit does not matter. I repeat, the trade deficit DOES NOT MATTER. Milton Friedman explains why brilliantly:

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