With trade talks between the United States and China poised to enter a new phase, Donald Trump apparently decided it'd be wise to threaten Beijing with ridiculous new tariffs. Here was the American president's latest salvo, delivered via Twitter yesterday afternoon:
"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results.
"The 10% will go up to 25% on Friday. 325 Billions Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"
Right off the bat, it's important to note that the Republican appears to still be struggling with the details of his own trade policy. China, for example, isn't paying those tariffs; consumers in the United States are. The idea that non-existent "payments" from Beijing are boosting the American economy is completely bonkers.
Trump added this morning, "The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars."
No, actually, we don't. The American president continues to wildly exaggerate the size of our trade deficit with China, but just as importantly, Trump also doesn't yet grasp the fact that trade deficits are not evidence of money we've "lost."
Trump recently boasted, in reference to trade policy, "I understand that issue better than anybody." He later added, "I know every ingredient. I know every stat. I know it better than anybody knows it."
Oh, how I wish that were true.
But the larger significance of this goes beyond pointing and laughing at the American president's ignorance about one of his signature issues. In this case, Trump's confusion came with real consequences.