Protectionist's paradox could revitalize WTO

The US' trade policy is based on a big mistake: the idea that trade deficits are a national "loss" or "burden", and trade is a zero-sum game. This point of view contradicts the postwar consensus among economists that lowering trade barriers is a win-win policy that benefits every country. The main mistake that has led to this policy is the idea that exporting countries pay the extra tariffs, which allowed the US administration to portray a tax increase at home as a punishment for foreign competitors.

However, the truth is that tariffs are taxes or levies which importers pay, and the cost is mostly passed on to the businesses and consumers in the importing country.

Although this adversarial trade stance has hurt the US economy, it has also had an unintended effect. The US administration has unintentionally provided the strongest reason in a generation for the revitalization of multilateralism and the World Trade Organization by highlighting the chaos that would ensue in a world without rules.