By Robert Skidelsky SATED RADE
The trigger for America’s turn to economic nationalism is its widening trade deficit – $566 billion in 2017 and growing – as the U.S. economy recovers. But the deeper reason is the correct perception that the resulting current-account deficits are not “benign” when they are being financed by inflows of short-term capital, or “hot” money.
That became clear this year when U.S. President Donald Trump imposed the first of a widening set of tariffs against Chinese goods, with China retaliating in kind. Trump has also torn up two major international trade treaties and threatened to withdraw from the World Trade Organization.
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