“Trump trade policy in 2025 didn’t work as it ignored Economics 101,” written by Professor of Economics Devashish Mitra, was published on Moneycontrol.com. Following is an excerpt:On April 2nd, 2025, which he called Liberation Day, Trump announced “reciprocal tariffs” on imports from every nation. India was slapped with a 25% “reciprocal tariff,” even though its own overall trade-weighted average tariff was 12%. And, finally, there has been no attention to the basic accounting identity that a current account (trade) deficit is always accompanied by a capital account surplus of the same magnitude. Thus, the attractiveness of American financial assets can drive a capital account surplus, and, thereby, a trade deficit.

Source: The North Africa Journal January 07, 2026 19:10 UTC