What did Donald Trump do today?

He said he "loved" consumer prices going through the roof.

 

The basis of Trump's tariff policy in both terms has been his mistaken belief that when one country has a trade deficit with another—meaning it sells fewer goods and services than it buys—it is somehow "losing" or being "ripped off." In reality, for a wealthy country, moderate trade deficits are normal. Deficits in specific industries can be warning signs, but for the economy as a whole, they aren't usually an indicator of anything more than a country having the money to import the things it needs.

That false belief has driven Trump to try to drastically reduce the trade deficit with the United States' trading partners by imposing enormous tariffs based, in part, on the magnitude of the deficit with individual companies. Tariffs are taxes on imports that increase the price for consumers. 

Targeted tariffs can help steer buyers to domestic products, lessening a deficit. But that deficit-reduction only works to a certain extent, and only if there is a domestic industry ready to take on the excess demand. Trump's trade wars against (for all practical purposes) the entire world at once left consumers with no alternative but to pay the increased price on imported goods, while domestic prices rose too because of the inflationary effect.

More proof of that inflation came today, with the release of a government report showing year-on-year inflation at 4.2%. That's more than twice as high as the 2% inflation that economists believe is a healthy target.

Trump was asked about that troubling number today:

Q: Are you concerned, Mr. President, about the latest inflation numbers that came out this morning?

TRUMP: No, I love it. The, the numbers were great.

Trump's response on the deficit has also been backwards, even by his own generally confused understanding of trade policy. Yesterday, he posted a headline "bragging" that the US trade deficit had increased to record levels.

It wasn't even a recent occurrence: that link went to a Reuters article from January of this year. 

In other words, Trump spent more than a year trying to drive down the deficit in the mistaken belief that it was money that the United States was "losing," only to forget that and claim that a spike in trade deficits was a good thing. 

Why does this matter?

• Presidents who can't keep straight whether high inflation is good or bad aren't mentally competent for the job.