Trump has apparently told the EU that a trade deal can be made if the EU will agree to buy $350 billion in American energy a year. That is the kind of managed trade agreement I discussed in my previous post, and it would eliminate the deficit. But would it make sense in practice?
Questions abound. Is there an additional $350 billion in American energy that is available to be sold? What form would it take? If the Europeans needed it, why aren’t they buying it now? What would happen to the energy sources that they are using today? Would such an agreement, for example, mean an end to North Sea oil and nuclear power plants? Would the energy be purchased by governments, or the private sector? How would it be distributed? Which American companies would get the concessions? Do huge multi-national oil companies really deal in “American” energy? What would happen to energy prices at home with these massive exports? If domestic prices skyrocketed, how would that result in a manufacturing renaissance? And so on.
I just don’t see how this could work. Mercantilism and liberal democracy don’t mix.