from: https://cafehayek.com/2026/02/another-open-letter-to-scott-bessent.html
by Don Boudreaux on February 22, 2026
Scott Bessent, Secretary
U.S. Department of the Treasury
Washington, DC
Mr. Bessent:
Today on CNN you said that “the administration remains undeterred” at “getting rid of these massive trade imbalances” (“Treasury Secretary Scott Bessent: Tariff revenue projections ‘unchanged’ after SCOTUS ruling,” February 22).
What trade imbalances? U.S. trade deficits are balanced by U.S. capital-account surpluses. When exporting, importing, and foreign investing are all taken into account – as economics demands – there are no imbalances.
In short, every dollar that foreigners don’t spend buying American exports is a dollar invested, one way or another, in America.
Some of these invested dollars return to the U.S. as foreign direct investment. Is the administration undeterred in efforts to stop such investment? If so, why? Do you think that foreigners’ eagerness to invest in America is evidence that America is ‘losing’ – or being cheated – at trade? And why does the president brag about all the commitments that he allegedly extracts from foreign companies to establish or expand operations in the U.S. – investments that would increase foreign direct investment in the U.S. and, along with it, U.S. trade deficits? Has Mr. Trump changed his mind about these investments?
Some of these invested dollars return as purchases of shares of American companies, thus increasing the ability of these companies to expand and innovate as they also raise the value of Americans’ pension funds. Is the White House undeterred at obstructing American companies’ access to foreign financing and reducing the value of Americans’ savings?
Some of these invested dollars return as purchases of U.S. Treasuries, thus preventing the U.S. government’s fiscal incontinence from pushing interest rates to heights those rates would reach absent these inflows of dollars from abroad. Are you and your colleagues undeterred in your efforts to jack up interest rates by preventing foreigners from lending dollars to the government?
Some of these dollars circulate globally as the global reserve currency, thus allowing us Americans the enormous advantage of buying foreign-made goods, or investing abroad, for the price of printing (or, even better, digitally creating) dollars. Is the administration undeterred at stripping us Americans of this advantage? If so, can you tell us when Mr. Trump changed his mind about wanting the dollar to remain the global reserve currency? After all, if the administration is determined to ensure that the dollar remains the global reserve currency it simply cannot, as a practical matter, also be undeterred at “getting rid” of what you misleadingly call “massive trade imbalances.”
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030