Re:New US Tariffs are Anti-Maker and Will Encourage Offshoring
by defertoreptar on Wednesday June 20, 2018 @10:07AM
(#17355455)
You've said nothing wrong, and at the same time I'm not sure how that contradicts my point. A large trade deficit does indicate that one country's protectionism outweighs the other (i.e. larger tariffs result in a deficit).
A “trade deficit” is just another name for a capital inflow surplus.
If you want a smaller trade deficit, reduce the degree to which you systematically favor capital.
Of course, what policymakers usually justify based on a trade deficit is increased support for domestically headquartered firms and other supports for capital invested in the country, which results in more net foreign investment and higher trade deficit, which is used to support more capital-serving policy, which results in more capital inflows, etc.