How Trump Misunderstands Trade

"The notion that trade deficits are always bad for the economy is based on several fundamental mistakes. The first mistake is the assumption that trade is a zero-sum game, suggesting that the country selling products abroad is a winner while the one who buys is a loser. That’s simply wrong. Foreign investment is key to our economic growth here at home -- we Americans win when we get to buy the stuff we want from abroad and when those dollars are pumped back into our economy."" Trump should be careful what he wishes for. His attempt to reduce the trade deficit with tariffs will lead not only to fewer imports but also to fewer exports, as economists have long understood.Fueling this bipartisan hysteria is the widespread failure to understand that US trade deficits generally add capital to our economy — more factories, more R & D or more machines"