President Trump has been right about many things. But when it comes to tariffs, he’s wrong about nearly everything. And not just a little wrong, he’s astonishingly wrong. And the great mystery is he has several good economists around him who know he’s wrong and surely have tried to explain it to him — apparently to no avail.

But if he would listen to them, here’s what they would tell him.

Trade balances don’t matter. Trump has long been obsessed with the U.S. trade deficit. Most economists aren’t. For decades the U.S. has bought more from other countries than other countries have bought from us, which means we always have an annual trade deficit. According to the Census Bureau, the U.S. trade deficit was $436 billion in 2000, $635 billion in 2010, and $1.06 trillion in 2023. About the only time the trade deficit goes down is when people have less money to spend because the country is in an economic recession.

But doesn’t that mean other countries (e.g., China) are “winning,” as Trump says, while the U.S. is losing? No, and to understand why, consider a household. Your household may have lots of trade deficits: with the grocery store, gas station, department stores, pharmacy and restaurants. You buy from them, but they don’t buy from you. Do you consider yourself losing? That system works because your household produces enough wealth (i.e., income) to pay those bills. And when you make more money, you’re likely to spend even more, increasing your trade deficits.

Countries are no different. The U.S. is the wealthiest country in the world.

© The Hill