During his first term, US President Donald Trump pursued aggressive tariffs and tax cuts that led to a sharp increase in both the trade and budget deficits. Having seemingly learned nothing, he appears determined to double down on these destructive policies, risking a global downturn.
WASHINGTON, DC – The Spanish philosopher George Santayana famously warned that those who fail to learn from the past are doomed to repeat it. Judging by US President Donald Trump’s continued insistence that he can eliminate the trade deficit through import tariffs, one cannot help but wonder whether he has learned anything from his failure to do so during his first term. If he had, he might have recognized a basic economic reality: tariffs alone will not reduce the trade deficit, especially when paired with massive tax cuts that cause the budget deficit to balloon.
WASHINGTON, DC – The Spanish philosopher George Santayana famously warned that those who fail to learn from the past are doomed to repeat it. Judging by US President Donald Trump’s continued insistence that he can eliminate the trade deficit through import tariffs, one cannot help but wonder whether he has learned anything from his failure to do so during his first term. If he had, he might have recognized a basic economic reality: tariffs alone will not reduce the trade deficit, especially when paired with massive tax cuts that cause the budget deficit to balloon.