>The current US administration's weird argument is that the USD values exchanged in inter-national trades must be symmetrical, In Econ 101 going back to Keynes

>The current US administration's weird argument is that the USD values exchanged in inter-national trades must be symmetrical, In Econ 101 going back to Keynes, if you run a persistent current account surplus, the increased demand for your currency to pay for your exports will strengthen your currency, thus reducing the competiveness of your exports, thus reducing your trade surplus. Vice versa for a deficit. Hence persistent trade imabalances should not exist due to self-balancing FX-effects. This isn't happening in reality for a variety of reasons, but it's common knowledge that it's government policies that directly try to prevent that from occuring. Capital Controls, Protectionist Policies, etc, the most explicit mechanism is the controversial currency manipulation, whereby many central banks manage capital inflows by buying US assets to keep their currency stable. But the aggregate result of this is that we have a strange situation today whereby the US dollar is simultaneously strong yet running a massive deficit, while surplus countries have weak currencies. And these imbalances are growing rather than shrinking. Many mainstream economists don't think the situtation is sustainable, but their proposals to fix it are differing. I'd agree that Trump's method of "forcing" other countries to buy more American stuff is just a short-term fix that won't solve the underlying issues, but the real solutions of tariffs, currency revaluations or introducing capital controls will be hard to stomach for everyone, albeit necessary. Although the "correct" solutions like the Bancor will all be much more harmful to surplus countries than the USA.