Want to help President Trump achieve his biggest goal on trade? Well, you can, by doing one simple thing: buy less and save more.
One of Trump’s top priorities is reducing the U.S. trade deficit, which was $552 billion last year. Trump has singled out China in particular, since that one country accounts for the bulk of America’s trade deficit with the world. In 2017, Americans bought $524 billion worth of Chinese stuff, while the Chinese bought only $188 billion worth of American goods and services. So the U.S. trade deficit with China was $336 billion.
Most economists say there’s nothing inherently wrong with a trade deficit. Americans pay dollars for stuff they want, and foreigners get dollars that they must invest somewhere—often, in U.S. assets like Treasury or corporate securities. But Trump sees it differently, and has made it a priority to reduce the U.S. trade deficit with China and other countries.
“We benefit from trade,” says economist Desmond Lachman of the American Enterprise Institute, a former deputy director at the International Monetary Fund. “The problem is there are people around Trump telling him that trade is a zero-sum game, that if you win, someone else loses.”