Trump's Tariffs: Wrong Policy Driven by a Wrong Premise
C4FE Economic Insight | April 2025
Over at C4FE Economic Insights - the student-led monthly publication of the Center for Free Enterprise - Prince Acheampong writes about a wrong premise driving Trump’s tariffs. That is, that trade deficit with specific countries is a bad thing.
Here is a snippet:
But beyond the flaws in Trump’s argument lies a deeper issue: the entire analysis is premised on a fundamental misunderstanding. As noted earlier, trade deficits are not inherently bad; they are often a healthy sign of global economic integration. All countries run trade deficits with some trading partners, just as individuals run “trade deficits” with certain businesses. By Trump’s logic, every trip to the grocery store would make you a victim of a trade deficit, suggesting you should impose a tariff on yourself to balance the “unfair” exchange. But not having to grow your food is precisely what allows you to focus on your strengths and enjoy a higher standard of living. Having a trade deficit with a grocery store is something to strive for, since the alternative is living like Robinson Crusoe.
Read the whole piece over at C4FE Economic Insights.
