James Pethokoukis at the American Enterprise Institute asked his colleagues the following: should running a trade surplus be a goal for the U.S. economy?
Desmond Lachman: “Arithmetically one country’s trade surplus has to be other countries’ trade deficits. For this reason, a legitimate objective of US trade policy should be that of restricting countries like Germany which are running excessive trade surpluses at a time that the world has a shortage of aggregate demand… Historical experience would tell us that the last thing that the US should do is to pursue unilateral policies to generate a trade surplus through restricting imports by tariffs or quotas.”
Derek Scissors: “The US should definitely not try to run a trade surplus. It also shouldn’t try to a run a trade deficit. The trade balance doesn’t mean what many people, including many politicians, think it means… If we ‘achieved’ a trade surplus by restricting things ordinary people can buy or making taxpayers pay for subsidized exports, we’d have a better government statistic [GDP] that usually means nothing at all. And tens of millions of Americans would be poorer.”