President-elect Donald Trump might be strengthening the U.S. dollar more by attacking the nation’s $500 billion trade deficit through trade wars, an economist said Wednesday.

But there is the risk that the more Trump attacks America’s three top trading partners – Canada, China and Mexico – the more the U.S. trade deficit might actually grow, said David Beckworth, economist and research fellow for the Mercatus Center at George Mason University.

Beckworth spoke to the Bowling Green Noon Rotary Club at the Holiday Inn University Plaza.

The trade deficit is based on the United States essentially providing the rest of the world with safe, stable currency, sort of acting as the “banker to the world,” he said.

A strong U.S. dollar means the U.S. economy is healthier than the rest of the world, pushing up interest rates. Chinese currency and its economy, on the other hand, continues to be shrouded in secrecy.

“(Financial) expectations have exploded under Trump,” Beckworth said, and that continues to drive the U.S. dollar up in value.

“Trump wants to bring the trade deficit down, but that makes the dollar stronger,” he said.

While there is $10 trillion in debt outside the United States that has been issued by countries other than America, the United States continues to import more than it exports in goods and services. The current $500 billion U.S. trade deficit has actually declined from the deficit of $800 billion posted in 2006.

Trade deficits with Canada, China and Mexico are $632 billion, $562 billion and $507 billion, respectively

“The U.S. is good at providing financial services to world, safe asset accounts,” Beckworth said.

The U.S. standing of being the go-to source for the world’s money needs can only be diminished by fiscal recklessness, Beckworth said.

Right now, one of the things America does really well is be a debtor.

“We are the biggest debtor in the world,” the economist said. “If the world continues to bring money here, we will continue to run trade deficits.”

Trump’s policies, many of which are still up in the air, could alter global economics, Beckworth said. They also could spur the nation’s economic growth.

“I think we are going to see growth going forward,” he said.

Trump has announced, at various times, he wants to re-negotiate the North American Free Trade Agreement, withdraw from the Trans-Pacific Partnership Agreement, label China as a “currency manipulator,” enact a 10 percent tariff on imports, pursue a border adjustment tax and eliminate the U.S. trade deficit.

That approach flies into the reality of a 70-year trend of the U.S. increasing its trade deficit and the current structural changes in the U.S. economy. For example, manufacturing output in America is at an all-time high while the number of manufacturing jobs is at an all-time low.

The United States peaked in manufacturing jobs at the end of World War II, Beckworth said.

Founded in 1980, the Mercatus Center is located on George Mason University’s Arlington and Fairfax campuses in Virginia. The research institution looks at public policy questions. Beckworth, formerly on the Western Kentucky University faculty, is a former international economist at the U.S. Department of the Treasury.

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