Send Trade Critics Back to School
Bryan Riley /
Critics of free trade have used funny math to mislead Americans for decades. It may be time to send these critics back to grade school, so they can learn how to add and subtract.
Consider the following interpretation of this May’s international trade statistics: “Oil and consumer goods from China account for nearly the entire trade deficit.” Don’t you believe it.
Suppose your best friend spent $1,000 more than he made in May. Say he earned $2,000 and spent $1,000 on housing, $1,000 on clothing, and $1,000 on food. What accounts for his $1,000 budget deficit?
Once you answer that question, you can use the chart below to calculate what percent of the $42.3 billion May trade deficit is accounted for by imports of oil and goods from China (see chart). (more…)