A REBOOT
The problem for Trump is that America’s trading partners have seen how quickly he will backtrack on his trade threats as more Americans sour on his handling of the economy, especially as he openly talks about households having to make sacrifices.
“Somebody said, ‘oh, the shelves, is it going to be open?’ Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally,” Trump said during an Apr 30 Cabinet meeting. Telling Americans they have to tighten their belts is never a winning message for politicians.
If Trump stuck to the three objectives initially laid out, all this would be understandable and maybe the economic pain a bit more tolerable. Trump has lately focused, however, on his stubborn belief that America’s trade deficit is costing the country money. But as economists such as Nobel laureate Paul Krugman have pointed out, a trade deficit neither means trade is unfair nor that the country with the deficit is losing money. Instead, it is the flip side of large capital flows into the US, flows that help finance US debt and budget deficits.
Trump sees it differently. When asked today about his trade war causing cargo ships to stop coming into West Coast ports, potentially costing dockworkers and truckers their jobs, Trump replied “good”, saying it means the US wouldn’t be losing money. That sound like the perfect script for a Seinfeld reboot.
