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Ending the U.S. trade deficit with tariffs is impossible, and it risks eliminating two longstanding U.S. surpluses

The article from Fortune discusses the complexities of the U.S. trade deficit, particularly in relation to tariffs and the broader economic context. It highlights that while the U.S. has a goods trade deficit, it also has a surplus in services and capital, which are often overlooked in discussions about trade imbalances. The piece argues that tariffs, such as those imposed by the Trump administration, are unlikely to significantly reduce the trade deficit because they do not address the underlying factors driving it, such as the U.S. being an attractive destination for foreign investment. The article also points out that the trade deficit is not necessarily a sign of economic weakness, as it can reflect a strong economy that attracts foreign capital. Furthermore, it suggests that a more comprehensive approach to understanding trade, including the role of services and capital flows, is necessary for effective policy-making.

Read the Full Fortune Article at:
[ https://fortune.com/article/tariffs-trade-deficit-services-capital-surplus/ ]