Yesterday, we demonstrated why a focus on bilateral trade deficits will provide misguided (at best) or counterproductive and harmful (at worst) lessons to policymakers. In short, companies contribute to bilateral trade deficits with some countries and bilateral surpluses with other – but a report on bilateral deficits will almost never captur...
Continue readingIn March, President Trump signed an Executive Order (EO) calling for a report on the causes of “Significant Trade Deficits.” Economists generally agree that macroeconomic factors related to national savings and investment rates drive trade balances, and we subscribe to that view as well. The EO and forthcoming report ensures that much i...
Continue readingDiscussions about trade often present a false dichotomy: if exports are good and then imports must be bad. This oversimplified view lends itself to policy prescriptions that encourage exporters and discourage importers. Yet the real world is much more complicated as demonstrated by the types of products imported under GSP. The leading category of G...
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