New Delhi, April 23 -- President Donald Trump's flip-flops on tariffs-starting with the Liberation Day announcement, followed by a 90-day pause, and then exemptions on select items-have kept the world guessing. But it would be a mistake to dismiss these actions as random or uninformed. In fact, Trump's trade and fiscal manoeuvers so far appear to revolve around a single macroeconomic equation.

The equation is simple: a country's current account balance equals the gap between its savings and investment. In other words, to eliminate a current account deficit (CAD), a nation must either boost savings, cut investment, or both. Trump has made it clear he wants to shrink the US CAD. Here's how that could play out.

The US runs a persistent cur...