Trade War

I have been an advocate of more rationality in United States trade polices for a long time. I recommend the book FREE TRADE DOESN'T WORK, by my friend Ian Fletcher [free download here - http://ebooklibrary.space/?book=0578082667] for some background.

Since the fix is fairly simple as seen below, one is led to question Trump's motives in calling for a trade war. Merely fixing trade policy and gaining some votes from tariffs fails to address the overall impact of his actions.

Rather, it is likely that he is attempting to create division in the world where there was none before. This trade war might create a real recession. Methinks perhaps he is serving some mysterious master of discord.

Or, he could be a simple dolt, but that is unlikely.

At any rate, here are some numbers to consider.

US GDP was $18.6 trillion in 2016.

Total imports were $2.9 trillion in 2017 [or 16% of GDP] while the trade deficit [excess of import value over export value] was $0.57 trillion [ or 3% of GDP], also in 2017.

A simple, across the board tariff increase spread among all countries and all goods of $600 billion would solve any economic problem from a deficit. I don't know what percent tariffs would increase by to achieve that goal, but I am pretty sure that our trade agreements allow for such adjustments in the interest of national well-being.

That would amount to a 20% of our current account deficit as an increase in tariff revenue collected and would balance our trade. This would solve our economic issues from trade. Trade would then be in balance with no deficit or surplus.

Since we are the only large economy with a trade deficit, it could be soft-pedaled to our trading partners as a corrective device and not meant to harm them deliberately.