Scapegoating trade for problems real and imagined has been a prominent part of American electoral politics for 25 years. So, during the campaign, when candidate Donald Trump referred to the North American Free Trade Agreement as “the worst trade deal ever negotiated,” his rhetoric wasn’t especially alarming.
But President Trump’s recent announcement that his administration will reopen and renegotiate NAFTA is cause for deep concern. It’s not that NAFTA is a perfect agreement that wouldn’t benefit from some updating. The concern is that Trump will reach for a sledgehammer instead of a scalpel.

The president claims that NAFTA has been a failure, and cites America’s $60 billion bilateral trade deficit with Mexico as the evidence. In his mistaken view, exports are Team America’s points and imports are the foreign team’s points, so the deficit means we are losing. And the reason the United States is losing is because U.S. negotiators were outsmarted in the early 1990s or our trading partners—especially Mexico—have been cheating with impunity. Outside of the Trump administration, one would be hard pressed to find an economist who believes that the trade balance is a measure of the efficacy of trade policy.