Trump’s fantasy trade war

Trump's fantasy trade war

by digby

The United States trade deficit widened in June and is on track to be the biggest in a decade despite President Trump’s efforts to slash it.

For the first half of 2018, the trade deficit in goods and services hit $291.2 billion, the federal government reported Friday, which is higher than last year and puts the nation on track to have the largest annual deficit since 2008.

Trump has repeatedly promised to reduce the trade deficit during his White House tenure, but so far, it has grown under his watch.

He claims America’s “massive” trade deficit is a sign the country is getting beaten by China, Germany and others, and he blames the deficit on “very stupid” trade deals. Most economists do not view the trade deficit as a problem. They point out that a big driving factor behind the higher trade deficit this year is that U.S. consumers are buying more stuff. That’s happening largely because the U.S. economy is doing well and people feel bullish enough to shop more for goods. Trump’s tax cuts have also helped fuel the buying spree for foreign products.

“While the administration is intent on reducing the trade deficit — which it wrongly perceives to be the result of unfair trade practices — the implementation of a late-cycle fiscal stimulus package will put further upward pressure on the trade deficit in the coming months,” said Gregory Daco, head of U.S. economics at Oxford Economics, a research firm.

But Trump doesn’t see it that way. He views trade as a zero-sum game where one country is winning and the other is losing. He claims trade wars are “easy to win” and he has launched battles with numerous countries in an effort to pressure their leaders to come to the negotiating table.

They probably would do it just to appease him but he's so incoherent they don't have any idea how to do it.

This presidency just gets weirder and weirder and weirder.