Thursday, March 7, 2019

What did Donald Trump do today?

He weighed in on global trade.

At a joint press conference with the visiting  of the Czech Republic, Trump was asked by a Czech reporter about trade between the two countries. (The Czech Republic has not been directly targeted by Trump's so-called "national security" tariffs.

Here is how Trump responded, in full:

Q    Mr. President, trade between Czech Republic and the United States it’s growing just right now.  Very good —
TRUMP:  Say it?
Q    — very high numbers.  But the potential tariffs on the cars could be very harmful to the Czech economy.
TRUMP:  I don’t — I don’t understand.Thank you.

 While Trump might be forgiven for not knowing the minutia of U.S.-Czech trade numbers, his non-answer is revealing all the same. Trump has spent much of the last year insisting that the United States is "winning" a trade war with China that has seen disastrous disruptions to small businesses and farms. But he has gone suddenly silent this week, most likely because of a government report showing that the United States' world trade deficit has risen to a record high in the past year, up by 12.5% to almost $900 billion.

In other words, Trump is ducking trade questions because his decision to impose taxes on American consumers who buy foreign goods has had exactly the opposite effect than what he intended.

If Trump understood how tariffs work a year into his trade war, he might actually be bragging about this result. He's utterly failed to stimulate American production, but otherwise the increased deficit is not actually terrible news, since it means that American consumers are generally confident enough to buy goods. But Trump seems incapable of understanding that trade between countries is not a sign of weakness.

So what?

  • Ignoring problems doesn't make them go away.
  • Some degree of basic economic literacy, or the ability to acquire it, is mandatory for a president.