This situation feels dumb. I feel like I am watching idiots cheer on someone doing parkor and that person getting his teeth smashed on a wall. Like, what is the point?
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For centuries the theory was mercantilism which is the highest imbalance of trade in your favor is good.
The last century was Keynesian “deficits don’t matter” where taken to its conclusion, the worst possible imbalance is good, because that means they have to reinvest their dollars which supports the US, blah blah.
I’m open to the experiment where targeting a balanced trade with all countries as the goal. Using tariffs where imbalances exist, especially when countries arbitrarily lock your goods out of their markets, is a tool for fixing this.
One reason the US is so fucked up for the lower and middle classes is our global reserve currency and how it provides increasing pressure on the dollar and slowly deindustrializes our society. This has been pushing us towards ever more radical politics
Do you mean balanced trade as a whole, so it would be OK to have deficits or surpluses with individual countries as long as the total surpluses match the total deficits? Or do you mean trade with each individual country should be balanced?
Tariffs artificially increase costs of goods with another country. That should incentivize purchasing the goods from other countries, with the cheapest being our own. Of course we have very high labor costs, and lack a huge supply chain, and on and on. But China only 50 years ago had very little of the same, and America systematically de-industrialized, teaching other countries, moving the kit, and so on, until we lost the ability to make things at scale cheaply ourselves. But the same thing can happen in reverse, there is nothing inherently impossible about having Americans build and run factories, with the benefit of robots and AI and all the latest tools.
Suppose for example the US needs to buy some natural resource from country X, which the US uses to build something that it sells to country Y at a very large profit. Suppose that the US doesn't export anything that country X needs or wants.
Balancing trade with X would mean cutting back on importing that natural resource, which would cut back on how much the US can build to sell to Y.
There will almost certainly also be loops in the graph of imports and exports. Things like A exports to B exports to C exports to A, with A, B, and C all having net balanced trade, but with each have a trade surplus with one of the others and a trade deficit with one.
If they all tried to force balanced trade with tariffs they just all end up paying more with no actual change in trade except possibly a reduction all around in the volume of trade.