BEIJING, Jan. 31 (Xinhua) -- U.S. President Donald Trump and his trade team remain clueless about the economics of trade and Washington's wrongheaded and dangerous trade policy could result in a trade war of no winners, said a U.S. scholar.
The recent imposition of tariffs targeted on American's imported solar panels and washing machines were the latest evidence about their cluelessness on the economics of trade, according to Steve Hanke, professor at the Johns Hopkins University and Senior Fellow at the Cato Institute in an article published on a business website themaven.net.
He wrote that "Trump and his trade team all embraced the notion that the U.S. trade deficit is a 'bad' thing that should be dramatically reduced (or eliminated) if America is to be First."
They believed that the culprits for the U.S. trade deficit are "unfair trade deals and unfair trade practices employed by foreign countries."
In fact, the U.S. trade deficit is just the mirror image of what is happening in the U.S. domestic economy, which means if the expenditures in the U.S. exceed the incomes produced in the U.S., there will be a trade deficit, he said.
"Trump can bully countries he identifies as unfair traders...but it won't change the trade balance. It will only alter the composition of those exporting to the U.S....and will hurt the U.S. consumers," he added.
Hanke also warned that Trump's fiscal policy of expanding the government deficit will balloon the U.S. trade deficit.
During fiscal year 2017, the U.S. federal government received approximately 3.3 trillion U.S. dollars and had a spending of 4 trillion dollars, the government deficit was 666 billion dollars, up 80 billion dollars from 2016, according to data released by the U.S. Congressional Budget Office.
The tariffs marked the first time ever that the U.S. government has used the so-called Section 201, an outdated tool under a rarely used Trade Act of 1974, to unilaterally impose tariffs or other trade restrictions on foreign imports since 2001.
