There’s not a lot of irony in trade politics, but more ignorance. It’s perfectly fine to have a trade deficit with individual countries. The layman’s example is that most of us have a trade surplus with our employers, and deficits with retail outlets. It all balances out.

The US trade deficit is mostly balanced out by service (often not counted) and investment flows. The US could theoretically end most of its trade deficits if it balanced its budget, thus reducing demand for treasuries. However, that would come with other pitfalls. It would either entail tax increases, spending cuts, or both at the government level and it would then bleed into the standard of living of most Americans as foreign investment slowed down.

It doesn’t surprise me at all to see yields go up as foreigners invest less into the US as they get dinged sending goods here. So maybe that’s ironic…