The Trade Deficit Doesn’t Matter

Walter E. Williams explains, without ever using the word, why “tariffs” are a bad idea and wholly unnecessary. Lela

 

Let’s look at the political angst over trade deficits. A trade deficit is when people in one country buy more from another country than the other country’s people buy from them. There cannot be a trade deficit in a true economic sense. Let’s examine this.

I buy more from my grocer than he buys from me. That means I have a trade deficit with my grocer. My grocer buys more from his wholesaler than his wholesaler buys from him.

Source: The Trade Deficit Doesn’t Matter