Underscoring once again Trump's massive ignorance regarding how international trade and capital flows work, his administration is now floating the idea of imposing a 20% tax on Mexican imports as a way to pay for building a wall along the US-Mexico border. This of course would penalize Mexico to a degree, since it would make Mexican goods more expensive to US consumers and thus would likely reduce to some degree the amount of Mexican goods that US consumers purchase. But whatever tax is eventually collected on Mexican imports would unquestionably be paid 100% by US consumers. This is just plain stupid, like cutting off your nose to spite your face.
Most of the things Trump has done in his first few days have been impressive: e.g., mostly good people appointed to key positions, decisive moves to roll back some of Obama's more egregious regulations. But his approach to trade remains abysmally wrong-headed and potentially threatening.
Any decent student of international trade and capital flows knows that there is nothing per se wrong with a deficit in commercial trade, since it is automatically offset by a surplus in capital flows, much of which could be investment-related. This is particularly true in the case of the US, since the dollar is free-floating: imbalances in trade and capital flows, if they exist, must inevitably show up in a compensating manner in the exchange rate. In the past year or so, the dollar has been stable to stronger, and that suggests that more people want to buy dollars than sell them. Since our trade deficit persists, it is logical to assume that foreigners are apparently more eager to buy dollars for investment purposes, than to buy dollars for the purpose of purchasing our goods. What's wrong with having foreigners anxious to invest in US assets?
Instead of marching to protest all the things that the left imagines Trump will do to trample civil rights and denigrate women—none of which has yet to happen—everyone should be marching to protest his professed desire to make life more expensive for US consumers.
If the MSM can't figure this out, they deserve to go out of business.
UPDATE: Don Boudreaux says the same thing, perhaps in a more concise way.