Trump’s obsession with trade deficits has no basis in economics. And it’s a bad reason for tariffs

By Nigel Driffield, Professor of International Business, Warwick Business School, University of Warwick

Those of us who study trade and investment for a living are, I suspect, becoming exasperated with both the White House stance on tariffs and the way that this is reported in much of the media. US president Donald Trump believes that if a country has a trade surplus with the US it is somehow playing unfairly and needs to be dealt with. But anyone who understands the basics of international economics will recognise the fallacy in both of these beliefs.

Trade takes place based on what economists call “comparative advantage”…

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