For the US, cutting both taxes and trade deficits aren't compatible

US President Donald Trump returned from his recent trip to Asia, announcing that he would work "as fast as possible" to eliminate the sizable trade deficits with America's trading partners, insisting that it was "unacceptable" that the US trade deficit with other nations stood at about US$800 billion a year.

And then after pledging to eradicate US trade deficits as soon as possible, he tweeted that first on his agenda would be a "GREAT Tax Bill!" that he and his Republican allies on Capitol Hill would be working on in the coming weeks.

Sounds great. The problem is that these two goals - reducing the trade deficit and cutting tax revenues - may be incompatible.