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Pres. Trump has done a wonderful job in reducing environmental regulation, but he’s wrong about the significance of trade deficits. They’re not a loss. They reflect foreign purchases of securities, which give us the money to buy/import goods without having to sell/export goods.
China holds over $1 trillion in US gov’t. debt. That trillion has made possible the purchase of a trillion of imports from China and elsewhere, that we don’t need exports to finance. Similarly for purchases of stocks and real estate.
If anything, Chinese accumulation of gov’t. securities and paper currency is a potential sucker deal for the Chinese. It amounts to their giving us real goods in exchange for potentially valueless pieces of government paper.
This doesn’t mean we shouldn’t be concerned about the loss of American manufacturing. But that’s not the fault of the Chinese, but rather of ever-more US Government intervention that keeps driving up our manufacturing costs.
The solution for the consequences of government intervention that makes our manufacturing uncompetitive is not more government intervention, in the form of tariffs, but the elimination of the government intervention that makes our manufacturing uncompetitive in the first place.
