How are trade partners to respond when US policymakers talk nonsense? That is the situation in which Europeans, Japanese and South Koreans now find themselves. The words of Wilbur Ross, US commerce secretary, and the man who Donald Trump trusts most on trade policy, show one can be a billionaire and yet not understand how the economy works, just as one can be an athlete and not understand physiology.
Objecting to warnings of protectionism from Christine Lagarde, managing director of the International Monetary Fund, Mr Ross told the Financial Times that “we are the least protectionist of the major areas. We are far less protectionist than Europe. We are far less protectionist than Japan. We are far less protectionist than China.”
He added: “We also have trade deficits with all three of those places. So they talk free trade. But in fact what they practice is protectionism. And every time we do anything to defend ourselves, even against the puny obligations that they have, they call that protectionism. It’s rubbish.”