Donald Trump is convinced that he's the smartest man in the country -- smarter than all the economists who spend their lives studying economic policy. That's why he started a trade war and told Americans that winning it would be very easy.
All he had to do was impose tariffs on some other countries (especially China), and they would submit to his will. He couldn't lose -- except that is exactly what is happening -- he's losing!
We know that the tariffs are not being paid by those other countries -- no matter how many times Trump says they are paying them. Those tariffs are just another tax on American consumers, as they have to pay higher prices for the goods subject to a tariff.
But it's even worse than that. The trade deficits with other countries are not decreasing. They are actually growing larger. As the chart above (from Axios.com) shows, the trade deficit with China has increased by 23.3%. And China is not the only one.
The deficit with the European Union has increased by 23.9%, with Mexico by 26.7%, with Germany by O.04%, with Japan by 2.6%, with Italy by 13.8%, and with France by 8.5%. The trade deficit with the entire world has increased by 24.8%.
It turns out that Trump is not nearly as smart as he claims to be, and trade wars are not easy to win. In fact, Trump is losing this trade war badly, and there's no indication that will change anytime soon.
