As Trump wages trade war, U.S. goods deficit hits record high in 2018

[MONIKATSI]

1 hour ago, MONIKATSI said:

President Donald Trump is pursuing a protectionist trade agenda to shield U.S. manufacturing from what he says is unfair foreign competition. Trump, who has dubbed himself "the tariff man," pledged on both the campaign trail and as president FileZilla Malwarebytes Rufus to reduce the deficit by shutting out more unfairly traded imports and renegotiating free trade agreements.

 

I'll explain this once more--the trade deficit is up because the federal deficit is up.  Foreigners love to hold US Treasuries.  They buy these treasuries using money they receive from our trade deficit.   If we weren't running a massive annual federal budget deficit then we would sell fewer treasuries.  The foreigners would have to do something else with the US dollars they make by selling stuff to us, something such as buying US goods.  That would lower the trade deficit.

[heybruce]

2 hours ago, MONIKATSI said:

President Donald Trump is pursuing a protectionist trade agenda to shield U.S. manufacturing from what he says is unfair foreign competition. Trump, who has dubbed himself "the tariff man," pledged on both the campaign trail and as president to reduce the deficit by shutting out more unfairly traded imports and renegotiating free trade agreements.

 

Another poster who has to prove he doesn't understand basic economics. 

 

Try answering this:  If other countries weren't running massive trade surpluses with the US, where would they get the money to fund our federal budget deficit by buying treasuries? 

 

If they won't fund our budget deficit, who will?  A one trillion dollar deficit funded entirely by the US would require an average of about $3000 a year in treasury purchases by every man, woman and child in the US every year.  What are the chances of that?

 

If we want to end the trade deficit, we need to bring down the budget deficit.  Then the countries buying treasuries couldn't by as much and would have to do something else with the US dollars they took in, such as buy US products.

[bristolboy]

7 hours ago, MONIKATSI said:

President Donald Trump is pursuing a protectionist trade agenda to shield U.S. manufacturing from what he says is unfair foreign competition. Trump, who has dubbed himself "the tariff man," pledged on both the campaign trail and as president to reduce the deficit by shutting out more unfairly traded imports and renegotiating free trade agreements.

 

And he did it in a particularly stupid way. By imposing tariffs on basic commodities like steel and aluminium, he raised the costs to all American manufacturers who consume the stuff. This has hurt American competitiveness in the automobile industry and others. It would have far more sensible, or less stupid, to have imposed tariffs on finished goods. 

[attrayant]

6 hours ago, MONIKATSI said:

I'll explain this once more

 

How can you explain something "once more" when you have only two posts and your first post didn't explain anything?

[ballpoint]

Just now, attrayant said:

 

How can you explain something "once more" when you have only two posts and your first post didn't explain anything?

Listen carefully...

[Prissana Pescud]

6 hours ago, bristolboy said:

And he did it in a particularly stupid way. By imposing tariffs on basic commodities like steel and aluminium, he raised the costs to all American manufacturers who consume the stuff. This has hurt American competitiveness in the automobile industry and others. It would have far more sensible, or less stupid, to have imposed tariffs on finished goods. 

The basic idea of protectionist tarrifs is to subsidise your own industry with tax payers money. This did not happen, instead US industry is paying a higher price for the local materials. (And gave the rich a tax break so they can buy expensive European cars and so on.)

Tarrif costs, of course is passed on to the consumer. Already, anything in the US made using local steel and aluminium, products costs far more than the goods that China can produce and ship to the US at a far cheaper price. The high US dollar makes US trade goods more expensive for the producer. It is a shoot me in the foot and aim the next shot at my head kind of mentality. It may have had a very small short term boost to the economy, but in the long run is a lose, lose deal.

A few people here in Thailand buy a Ford or GM car. But US ex pats at a guess.

The roads are full of Isuzu and Toyota because you get a more powerful car much cheaper. And the US soy beans I used to buy are no longer sold here.

And China and Thailand are cross trading agricultural products. The only US products I see on the shelf at Makro is Tabasco sauce, because that is the only way to make a bloody mary.

[heybruce]

13 hours ago, bristolboy said:

And he did it in a particularly stupid way. By imposing tariffs on basic commodities like steel and aluminium, he raised the costs to all American manufacturers who consume the stuff. This has hurt American competitiveness in the automobile industry and others. It would have far more sensible, or less stupid, to have imposed tariffs on finished goods. 

His greatest stupidity was in launching a trade war against the entire world, including our closest allies, instead of simply targeting China.  All developed nations hate China's abuse of intellectual property rights, restrictions on opening businesses without Chinese partners, and other restrictions on doing business in China.  Even Americans who oppose the tariffs acknowledge that something had to be done about China's unfair business practices.

 

If Trump had organized an alliance of our trading partners against China's business practices he would have had much greater and quicker success in changing the way China does business.  Unfortunately, as with everything else about this administration, Trump did not think things through, he grasped at what he thought was a simple solution.