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If Trump extends his wall to cover the entire border, instead of just the one shared with Mexico, and then bans or punitively tariffs every single good that uses steel as an input, recursively, as well he just may succeed in driving up the domestic price of final goods, to the point where both nominal labor compensation and nominal raw materials prices can be increased at the same time.

Kindergarten Arithmetic suggests the same thing. Trade wars are not easy to win, for the simple reason that no one wins trade wars.

His comment was in response to Let’s Eliminate the Trade Deficit! Yeah, What If? Please read that over and over again until it sinks in. The idea that the US trade deficit is somehow a disadvantage seems even more flawed from that perspective.“ It is basically is an exchange of nothing for something. “ Exchanging pieces of paper with a vague promise of payment for real goods strikes me as an excellent deal. Pater Tenebrarum at the Acting Man blog pinged me with an interesting comment today on this subject: If other countries want to subsidize the US, so much the better for US consumers. And it holds whether or not any other nation does the same. My proposal: “ Effective immediately all tariffs and all subsidies on all goods and services are eliminated.” A great agreement can fit on a napkin as I have stated many times. I do not advocate economic planning of any kind.

The Wall Street Journal has the complete timeline in Turnover Under Trump.Ī reader today accused me of being a “globalist”.īased on that definition, I certainly am not.

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