I'm normally not a big fan, but this is an absolutely brilliant answer by Larry Summers to the oft-repeated argument that China is somehow "cheating" in trade. In fact it's probably the best answer I've ever heard on this. It goes back to the point I was making (x.com/RnaudBertrand/status/1…) in reply to Steve Miran's completely insane argument that having the dollar as a reserve currency is such a burden to the US that other countries need to compensate them for it. Thanks to the dollar reserve status, to quote Summers's rhetorical question: "If China wants to sell us things at really low prices and the transaction is we get solar collectors or we get batteries that we can put in electric cars and we send them pieces of paper that we print. Do you think that's a good deal for us or a bad deal for us?" Characterizing this as "cheating", like Summers rightly says, should be rejected entirely. At the end of the day, who's more "cheated": the party doing the hard work of producing goods at very low prices on razor thin margins, or the party that simply prints a virtually infinite amount of fiat money to pay for all this stuff?

To learn about the methodology behind President Trump's reciprocal tariff calculations, visit USTR's website. ustr.gov/issue-areas/recipro…

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An unscheduled but necessary intervention in @FinancialReview. afr.com/policy/economy/ross-…