Here's something to remember:
Trade deficit = Net inflow of foreign capital
If we buy more goods from abroad than we sell, we must also sell more financial assets - like debt, stocks, and real estate - to other countries. America’s booming stock market and the high valuations of its companies are directly connected to our trade deficit. The world sells us consumer goods; we sell them financial assets. And creating valuable companies is what America does best. No other country in history has matched America's track record at generating valuable businesses - particularly in California’s Silicon Valley and Washington’s King County.
So, if Trump succeeds in lowering the trade deficit, he’ll simultaneously reduce the inflow of foreign capital, leading directly to lower stock prices and asset values.
Everything Trump understands about economics can be summed up in one idea: life is easier when you inherit half a billion dollars from your father. Capital flows? Trade balances? Try explaining these concepts to Trump or a MAGA follower, and they'll stare at you like you're speaking some foreign language. They might even try to put a tariff on your tongue.
