Mar-a-Lago's 'trade deficit' isn't a problem. Neither is America's

In the pantry, I would surely find coffee from Colombia or Kenya, tea from China or Sri Lanka, and olive oil pressed in Greece or Spain. Perhaps I would find the dining rooms well stocked with glassware from Austria or the Czech Republic; the porcelain dinnerware might be Wedgwood or Royal Doulton from England. Trump doesn't drink, but in his cellars there are likely cases of French and Italian wines for his guests who do, along with Russian vodka, Mexican tequila, and Scotch whisky. I wouldn't be surprised to see handwoven Turkish rugs on the floors, a Swiss watch or two on the dressers, and original silk hangings from Venice on the living room wall.

All that, of course, would be in addition to the palatial dwelling itself, which was built of Doria limestone imported from Genoa, marble blocks from Cuba, and tens of thousands of antique Spanish tiles.

Trump may be a fervent protectionist who deems "tariff" the most beautiful word in the English language and believes — as he told Congress on Tuesday — that Americans are being "ripped off" by the flow of imports into the United States. Yet his homes contain plenty of imported goods, equipment, materials, and foods — just as yours and mine do. In Trump's outlook, international trade is a zero-sum game, in which exporting is winning and importing is losing. But his own home demonstrates the absurdity of that view.

Mar-a-Lago, which exports nothing except perhaps some Trump-branded gift items to visitors from abroad, is running a lopsided trade "deficit" with the world. Does that mean its owner is getting ripped off? Of course not. Its owner is a powerful billionaire! Trump's ability to exchange dollars for such a vast assortment of household goods is a sign of his economic vitality and success.

Nevertheless, Trump has long persisted in believing that the way to expand American wealth is to make it harder for Americans to import goods from abroad. Hence his new trade war, launched with the imposition of a 25 percent tariff on most imports from Canada and Mexico and now scheduled to take effect on April 2.

"The tariffs are going to make us very rich and very strong," the president said when he announced the new import taxes last month. He repeated the claim on Capitol Hill last week.

But that can only be true if the way to enrich Americans is to reduce their choices and raise their prices. It's crackpot economics, and even if Trump's most devoted acolytes can't see that, the market can. When the new tariffs kicked in, Wall Street began hemorrhaging; by the end of the first trading day, the US stock market had shed more than $3 trillion in market value, wiping out all of the post-election "Trump bump."

Trump's rhetoric about trade oozes with nationalistic resentment.

"We support Canada $200 billion a year in subsidies one way or the other," he said at his recent Cabinet meeting. "We let them make millions of cars. We let them send us lumber. We don't need their lumber.... We have the best lumber there is. We don't need their lumber. What do we need their lumber for?"

None of that makes sense.

To begin with, Trump's basic facts are wrong: The US trade deficit with Canada is $63 billion, not $200 billion. More important, a trade deficit is not a subsidy. When US consumers and companies buy goods, services, equipment, and commodities from Canadian suppliers and manufacturers, they aren't bestowing a gift or paying above the market price. They are spending their wealth to buy things they want or need and can afford to pay foreigners to supply. The United States is not being cheated when it imports products from Canada and around the world; it is being enriched. Just like Mar-a-Lago.

Contrary to Trump's petulant claim, we do need Canadian lumber. Otherwise, American construction firms wouldn't buy tens of millions of cubic feet of it each year. They may want it for its particular quality, or for its proximity to northern US markets, or because of domestic supply constraints, or to take advantage of more favorable exchange rates or production costs. What matters is that they import Canadian lumber because doing so is good for Americans. The same is true of all international trade, just as it's true of all trade across state lines and municipal lines. Both sides benefit or there would be no deal.

For most of the past 50 years, the United States has run a trade deficit with the world. For most of those 50 years, the US economy has rocked. Curtailing Americans' ability to do business with their neighbors will not make America great again. It will only make it poorer, no matter how much Trump insists otherwise.

Jeff Jacoby is a columnist for The Boston Globe, from which this is reprinted with permission.

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