China has slapped reciprocal tariffs on the US. With Japan and the EU also gearing up to respond in kind to US President Donald Trump’s tariff offensive, world trade and growth are slated to suffer. India is preparing to negotiate its way out of the punitive tariffs placed against it. To fashion an effective policy response, it makes sense to identify the specific bee in Trump’s bonnet that is driving his tariff offensive.John Maynard Keynes once observed that “(p)ractical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” Trump’s trade delinquency stems from slavery to the defunct theory of mercantilism and ignorance of the concept of comparative advantage.
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