The "reciprocal" tariffs that President Donald Trump announced this week are based on a flagrant fallacy: the idea that there is something inherently suspicious about trade deficits. Unlike many of the positions that Trump has adopted as a politician, this one seems heartfelt and long predates his presidential campaigns. His comments on the subject during the last four decades reflect an unshakable belief that international trade is "fair" only when the dollar value of imports from any given country happens to match the dollar value of U.S. exports to that country.
Trump's long history of economic illiteracy suggests he is determined to pursue this trade war, which features import taxes that are much steeper and far broader than the ones he imposed during his first term, no matter how much pain it inflicts on American consumers and businesses. If there is any cause for hope on that score, it is Trump's similarly long-standing eagerness to look like a winner by making shrewd deals. The tension between those two instincts explains why Trump contradicts himself by presenting his tariffs as both a short-term bargaining tactic and a long-term strategy for raising revenue and boosting the U.S. economy.
When Trump published his first book, The Art of the Deal, in 1987, he saw Japan as America's main economic nemesis. "For decades now," he complained, "they have become wealthier in large measure by screwing the United States with a self-serving trade policy that our political leaders have never been able to fully understand or counteract." Although China has replaced Japan as the primary threat, Trump still believes that other countries "become wealthier" by "screwing the United States," the grievance at the heart of his new tariffs.
