Trump’s Trade Scam

By Stephen S. Roach – Project Syndicate

I could point to any number of actions Trump took on his first day back, but his memorandum detailing an “America First Trade Policy” caught my economist’s eye. It touches on the topics I have been writing about for years – trade deficits, unfair trading practices, currency alignments, and, of course, tariffs – and also bears critically on the US and global economic outlook.

Rather than rehash these contentious issues, I prefer to focus on Section 2(b) of this memorandum – Trump’s proposal to establish an “External Revenue Service.” A slyly named companion agency to the Internal Revenue Service, America’s tax collecting authority, the ERS would purportedly serve as a repository for the large tariff revenues that Trump insists he will amass from America’s foreign trading partners and channel toward the funding of his ambitious MAGA agenda. The idea is beyond ludicrous.