The U.S. trade deficit: It's time to dump do-it-yourself economics and go back to basics

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The U.S. trade deficit: It's time to dump do-it-yourself economics and go back to basics

^{Published on 2025-04-18 19:07:13 - Fortune}

The Trump admin and critics alike seem unaware of a key mechanism that governs the magnitude of a trade balance.

The article from Fortune, titled "Trump's Tariffs and the Trade Deficit: A Case of Do-It-Yourself Economics," critiques President Trump's approach to reducing the U.S. trade deficit through tariffs. It argues that Trump's belief in using tariffs to force other countries to buy more American goods is based on a misunderstanding of how trade works. The piece explains that trade deficits are influenced by broader economic factors, such as savings and investment rates, rather than simple bilateral trade balances. It highlights that Trump's tariff policies could lead to retaliatory measures from other countries, potentially harming U.S. exporters and increasing costs for American consumers. The article suggests that a more effective strategy would involve addressing underlying economic issues and fostering international cooperation rather than engaging in what it describes as "do-it-yourself economics."

Read the Full Fortune Article at:
[ https://fortune.com/article/trump-tariffs-trade-deficit-do-it-yourself-economics/ ]

N@N

The U.S. trade deficit: It's time to dump do-it-yourself economics and go back to basics