ECONOMY/TRADE DEALS/TREASURY: “The Trump administration plans to press Japan, Germany and other nations with which the U.S. has large trade deficits, to buy more U.S.-made commercial and military products as a way to boost jobs and reduce the nation’s $500 billion trade deficit.
‘Any country we have a significant trade deficit with needs to work with us on a product-by-product and sector-by-sector level to reduce that deficit over a specified period of time,’ Peter Navarro, director of the White House’s National Trade Council, said in an interview with The Wall Street Journal. ‘That can be achieved, if they buy more of our products than they now are buying from the rest of the world, whether it’s chemicals or corn or whether, from a national security perspective, it’s submarines or aircraft.’…
Even if the U.S. trade deficit declines, that doesn’t necessarily mean economic growth will rise. Japan ran trade surpluses when its economy barely grew in the late 1990s and 2000s. The U.S., on the other hand, grew robustly in the late 1990s with large trade deficits.
Former Clinton administration Treasury Secretary Lawrence Summers said he worried that an overarching focus on trade deficits could hurt U.S. exports by magnifying trade frictions with other nations.
‘If you try to build a bridge based on the wrong laws of physics, it will collapse,’ he said. ‘If you try to build an economic strategy on ideas that have been discredited for hundreds of years, it will be ineffective.’
Mr. Navarro plays an important role in setting trade policy, but must battle for influence, especially as Mr. Trump fills out his team.”
-Bob Davis, “To Reduce Trade Deficit, White House Wants Partners to Buy American,” The Wall Street Journal online, March 8, 2017