Trump & gang's trade deficit delusions could be disastrous for all and sundry

IF THERE is a single number that US President Donald Trump is obsessed with (besides the number of people who attended his inauguration), it is the US trade deficit, which he sees as indicative of US economic weakness, motivating his push for protectionist trade policies.

In this, he is supported by the head of his newly-created National Trade Council, economist Peter Navarro, and his nominee for Commerce Secretary, billionaire private-equity investor Wilbur Ross. Their thinking is at odds with that of other members of his administration, mainstream Congressional Republicans, and nearly all professional economists.

Regardless, the White House is now considering recalculating trade balances to exclude re-exports, that is goods which the US imports (say, from Mexico) and then re-exports (say, to Canada). This would inflate the size of the US trade deficit, presumably providing more ammunition for Mr Trump's plan to abrogate or renegotiate Nafta and other trade agreements.