Here’s a little bit of good news. Japan posted a $0.67 billion trade deficit in October as their manufactured exports failed to keep pace with their oil and food imports.
Japan famously mocks the United States any time Americans express concern about our enormous $60 billion per month trade deficit. They, the all-knowing gods of global trade, talk down to us as though we are economic buffoons, incapable of understanding the complexities and ethereal benefits of free trade, in the same manner that Enron executives belittled financial analysts who couldn’t understand their business plan. “Trade deficits have nothing to do with your economy in general or unemployment,” they tell us. “You Americans are too dumb to understand. We are the global masters of free trade. Believe us when we tell you that trade deficits are irrelevant.”
But see how fast they start wringing their hands if they have one! I wonder what kind of shape their economy would be in if they ran a $25 billion monthly trade deficit (the equivalent of ours for a nation their size) for decades, like we have. I say, let’s find out! Let’s impose the 40% tariff I proposed in Five Short Blasts on every manufactured product coming out of Japan. Why should they care? A trade deficit doesn’t matter, right? That’s what they always say. Let’s do that for about thirty years, after which we can get together and have a candid discussion about trade deficits. That is, of course, if there’s anything left of their economy to talk about.