We have defended President Trump’s reciprocal tariff concept when we thought it meant imposing bilateral tariffs equal to those imposed by our trading partners. That is not what the White House announced yesterday. Instead they put out a tariff schedule that assumed that every country’s trade deficit with the U.S. is the product of trade barriers:

“Tariffs are customized to each country,” an anonymous White House official explained “based on the concept that the trade deficit that we have with any given country is the sum of all the unfair trade practices, the sum of all cheating.”

Say what? It would be almost impossible for a smaller and poorer nation not to run a trade surplus with the U.S. considering how massive our consumer market is compared to theirs – so they get hit with the highest “reciprocal” tariffs.

As we have explained before, our trade deficit is simply the mirror image of our financial surplus.