Trump quickly responded to news that ships from China are no longer delivering goods to the US: “We were losing hundreds of billions of dollars with China. Now, we’re essentially not doing business with China. Therefore, we’re saving hundreds of billions of dollars. It’s very simple.” Why Trump is wrong No, it’s not so simple. Trump wants us to believe that if we decrease imports, everything else that factors into our economic wellbeing will stay the same. After all, he’d argue, the definition of Gross Domestic Product (GDP, which measures a country’s output) shows imports as a subtraction. We measure GDP as the sum of: Direct government expenditures (excludes transfer payments and interest on the debt. It’s federal personnel and purchases of goods like weapons) Domestic Consumption, which equals total Consumption minus the Consumption of goods and services we import Domestic Investment, which…
