Trump's trade policies

[sdiver68]

Yes, I believe you are missing the very definition of free trade and the conditions which have to be in place for it to work. Perhaps take what I wrote to 1 of your Econ professors with expertise in international trade and ask him/her to explain? I'm not trying to be a jerk but first we need to agree on a definition of free trade.

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[WildHorse]

I like that Trump is fighting against the ridiculously unbalanced trade deficit which has been going on for way too long.

Really now? And what advantage did my country (Canada) have over the US in trade? I'll save you the trouble. ZERO. I have nothing against Trump, but his rhetoric about the US in a trade deficit with Canada was 100% bullshit.

 

[WhiteyDog]

Really now? And what advantage did my country (Canada) have over the US in trade? I'll save you the trouble. ZERO. I have nothing against Trump, but his rhetoric about the US in a trade deficit with Canada was 100% bullshit.

The United States has had a trade deficit with Canada EVERY year since 1985. Recently, in 2017, the U.S. trade deficit with Canada was $282 billion in goods exported to Canada, with $299 billion coming from Canada. Also, our trade deficit with China: $130 billion worth of goods to China, WITH $506 BILLION worth of goods coming from CHINA as of 2017. I already said it earlier, I think Trump is a shyster and I'm sure he lies his *ss off like any other politician. I'm not pro Republican or pro Democrat, I'm for whoever is going to do the most good with the least amount of crooked underhanded tactics. Which is proving every year to be harder and harder.

 

[WildHorse]

^^ complete 100% bullshit. Seriously you need better info. U.S. exports were $320.1 billion, while imports were $307.6 billion. The United States had a $12.5 billion trade surplus with Canada (in 2016) and the gap has been increasing,. At no time since 85 has CANADA every held a trade surplus with the United States.

 

[WhiteyDog]

^^ complete 100% bullshit. Seriously you need better info. U.S. exports were $320.1 billion, while imports were $307.6 billion. The United States had a $12.5 billion trade surplus with Canada (in 2016) and the gap has been increasing,. At no time since 85 has CANADA every held a trade surplus with the United States.

https://www.census.gov/foreign-trade/balance/c1220.html

 

[sdiver68]

https://www.census.gov/foreign-trade/balance/c1220.html

That's only Goods. Trade occurs in both Goods AND Services. When you combine both goods and services, we are real close to even with Canada. Trans-shipments make it very difficult to pin the exact number...there are some alternate facts coming from the 2 sides.

Regardless, modern macroeconomic theory holds that trade deficits are not really a big deal either good or bad. What matters is balance of payments, of which trade balance is but 1 component.

 

[WhiteyDog]

That's only Goods. Trade occurs in both Goods AND Services. When you combine both goods and services, we are real close to even with Canada. Trans-shipments make it very difficult to pin the exact number...there are some alternate facts coming from the 2 sides.

Regardless, modern macroeconomic theory holds that trade deficits are not really a big deal either good or bad. What matters is balance of payments, of which trade balance is but 1 component.

Agreed, depending on where you pull the information from, you could probably pull different numbers all day long. That's why I pulled the info from the Census site instead of what Trump or his close staff could've quoted. You talk to any country's leader and of course they'll point the finger at everyone else. To tell you the truth, Canada wasn't even the country I was referring to when I first posted about the deficit, and h*ll, I have nothing against WildHorse either. There is still a deficit with Canada when including services, but yes, it is MUCH less than some of the other countries we deal with. Canada isn't the problem, sh*t, they're our allies right next door it's the oversees trade deficits that are the issue, and have been for years.

 

[Hack]

The economics of trade are very simple. If another country charges tariffs on our goods but we don't charge tariffs on their goods, American companies and individuals are at a disadvantage. So - it really doesn't bother me if foreign goods start costing more here. It just makes it easier for an American company to compete in the market.

I'm not so worried about balance of trade.

What I do worry about is that when the next president gets in office, it will most likely be a typical politician holding their hands out for money ready to do anything for the right incentive. Trump is trying to even the playing field for American workers. Most politicians are only there to look good and line their pockets with money.

 

[Gregs24]

What you have to understand is that if there is a trade deficit it is because US citizens are choosing to buy goods / services from overseas rather than at home - it isn't the US government or overseas governments problem. What you then have to ask is why ?

They are better value / quality than home grown products. Tariffs only work if they manipulate this deficit in value / quality and make people buy US products, but when the country you are buying from reciprocates then there is status quo - well other than everybody is paying more for the same thing. So the ONLY way US companies can sell more is to be better value / quality than the imports. If the Chinese workers are paid $2 per hour and US workers $10 per hour for the same product you CANNOT compete on price, therefore you have to add value to your US product to make it more desirable.

Any attempts to manipulate import prices via tariffs are doomed to failure (even if the other countries don't retaliate). Consumers are fickle and will always seek the best perceived value.

Look at mobile phones - Apple are far from the biggest selling brand but they are by far the most profitable brand. Why? Brand value. They don't need tariffs to protect them from cheap Chinese imports - they produce a high quality product with a rabidly protected brand value. Likewise Rolls Royce who really don't want to sell too many cars or they will dilute their exclusive brand.

It is a global market these days whether you like it or not and only the very fittest will survive.

 

[Hack]

What you have to understand is that if there is a trade deficit it is because US citizens are choosing to buy goods / services from overseas rather than at home - it isn't the US government or overseas governments problem. What you then have to ask is why ?
SNIP.

Your post is really well said and I agree 100%. There are certain things that it makes more sense to buy from a place with cheap labor, and other things that are produced in the US that are better than what you can buy from another country. It could be due to better automation, better materials, better product design.. lots of different factors.

That's all about trade balance. And a government can be protectionist and charge huge tariffs to protect an industry. I don't think that is a good idea for the US to do, except for industries that are really critical to the future of our country. However, there are some countries that we trade with that charge huge tariffs on American products. The US government can and should push on those countries to stop doing that. Those countries shouldn't get free, unrestricted opportunities to sell their products here in my opinion.

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