If you look at the overall picture, are their trade deficits?

[Kelley1]

Our government misleads by claiming their is a trade deficit with China. If you look at only the two countries, that is true. However, China has a trade deficit with Brazil, Venezuela, and other countries who in turn has trade deficits with the US. There are only two possibilities. (1) Either China burns the money they receive from the US. Those that believes the US has an overall trade deficit must believe China burn our money. (2) Or else, China spends the money by buying our Treasuries and purchasing from other countries. In that the case the money China received from the US comes back because China buys from other countries who in turn uses the money to buy from the US. There are no other possibilities. Therefore, unless you believe China and other countries burn our money, any claim the that the US has an overall trade deficit is ignorance.

It is the same within a country. Manufacturers, pay employees to manufacture goods. Therefore, they have a trade deficit with their employees. Walmart and other companies buy the manufactured good and the pay their employees. Therefore, they have a trade deficit with their employees and the manufacturers. Employees buy goods and services from companies. Therefore, they have a trade deficit with the companies they buy from.

Overall, it is balanced trade.

[Effably]

Just to establish facts, USA has a pretty major trade deficit.

The thing that is important to remember is that a trade deifict is not bad! It just sounds scary. Anyone with any economy degree is more puzzled by why this is being made such a big deal than what it is.

A trade deficit just means you spend more than another country. I have a trade deficit to my local convenience store! Those bastards never buy stuff from me. That does not make them bad. If they did not exist, I'd lose money, not earn it.

US trade deficit is similar. If you import steel, then refine and turn it into something worth 10x as much which you sell within your own country you have a trade deficit! Does this mean you should stop buying steel and earning 10x what you pay? Of course not.

In general countries with cheap labour who are selling their natural resources have a trade surplus. Countries with expensive labour have a trade deficit. Ask yourself if you'd rather do work and be paid 50$ per hour or 5$ per hour. If the answer is 50 and not 5, stop worrying about trade deficits unless unemployment is going crazy and if it is, that will naturally balance your trade as people will start working for less money.

[AviatorTom]

Of course, overall global trade is balanced. The laws if physics require that.

The real question is whether a trade deficit or surplus with a country is good or bad for a country, and there's no simple answer. US trade with New Zealand, forr example, is a trade deficit for the US. Looking at the major goods traded... US imports a greater dollar value of meat and wine from NZ than the US exports aircraft and technical devices to NZ. It's a trade defucit fir the US but both countries are happy with what they import and export.

[OneViewpoint]

The laws of physics require a trade balance. You really don't know anything about physics or economics do you? WTF do the natural laws of physics have to do with an abstract concept like a trade imbalance and economics invented by humans?

[Kelley1]

@OneViewpoint I agree he didn't use the proper term when he said the laws of physics instead of the Law of supply and demand. However, other than perhaps using an incorrect term, everything he said is 100% correct.

[OneViewpoint]

No, he wasn't even close to right in the example he cited with New Zealand. The law of supply and demand is very basic economics 101 used to expose first year students to some simple concepts in a theoretical closed environment. If you hang around for economics 402 you'll learn that it's a lot more complicated than that and the "LAW" of supply and demand is not a law at all.

This simple minded misinformation is what creates the lies that are passed around the internet as truth and picked up by other simple minded people who nod their heads in acceptance.

So explain to me how "Of course, overall global trade is balanced." Like it's the equivalent of the laws of thermodynamics.

[AviatorTom]

@OneViewpoint My laws of physics comment reference to global trade among countries, taken all together. For every trade, you have a seller and a buyer. Add up all the sellers and all the buyers, using their monetary value, and you end up with the same number, an overall trade balance globally. That's physics... what goes in must come out... conservation of energy.

Trade with individual countries is of course based on supply and demand, which is demonstrated by the NZ example. A trade imbalance is not bad if both countries are happy with the specific goods they trade, and any attempt to try to balance the trade monetary numbers, when the actual goods traded are different, doesn't make sense.

[OneViewpoint]

WOW! You're just gonna hang onto that misunderstanding. OK.

[Kelley1]

@OneViewpoint He is 100% correct. Although overall trade is balanced, trade between countries or individuals is seldom balanced; nor should it be.

[Fireguy17]

just for point of reference using China we the US bought 462.62 billion dollars' worth of goods from China in 24, China bought 143.55 billion dollars' worth of good from the US in 24, so I guess you could call a $419.07 billion dollar trade deficit a balanced trade between the 2 countries, but it isn't very close.
Say you have a business, you buy $100,000 worth of inventory in one year, you sell $25,000 worth of inventory that same year, and this continues year after year after year...
You keep shoveling money out the window, and the amount you shovel goes up every year. Pretty soon you are ass deep in widgets and where you were buying your widgets from has all of your money.
The more money we give to China the less we have, and in 1 year alone there was a paltry 419.07 billion dollar difference between what the US spent vs what China spent, which no matter how you want to try to rationalize it, is called a trade deficit.
So you now make the goods from China more expensive to level the playing field, the US buys less and less from China, you end up taking take 200 or 300 billion dollars a year out of China's economy and now they have an issue.
If tariffs are so bad why did Harley Davidson in 1983 beg and plead for tariffs against Japan because they were kicking Harley's ass when it came to motorcycles. The manufactures, Honda, Suzuki, Yamaha all had touring bikes that were more reliable, faster, more equipment, better technology and cost less than a Harley and importing them in huge numbers because they were selling as fast as they could make them. So much for resting on your loreals Harley.
A decade before Harley had a 100% share of the over 1,000cc motorcycles. A decade later Harley only had a 15% market share of the 1,000cc and larger bike, and the Japanese bikes cost 1,500 to 2,000 less than a Harley. In 1980 Harley had sales of 289 million and it dropped to 200 million in just 2 years.
So a tariff was issued and that gave Harley a chance to try to catch up to the Japanese.
The tariff started at 45% against the Japanese bikes, but they still sold.
Honda and Kawasaki moved some of their plants to the US and were able to make 90,000 bikes that were tariff free.
In 1987 Harley went back to congress and had the tariff lifted.
So those are all things to think about before people make a blanket statement that tariffs don't work.
Some countries have already agreed to drop their tariffs if the US drops theirs. Some overseas companies will be building plants here in the US, bringing more jobs.
Things will not happen overnight, but it will get better.
We have all of the resources, food, fuel, raw materials, oil coal so we do not need other countries. In turn they need the US for grain, iron, iron ore, coal to survive as they cannot raise enough grain to feed themselves, and other countries cannot match what the US can provide for raw materials.
Every year ships come into Duluth to load grain, taconite, coal to take back to China and other ports, so the need is real, that is a long journey at 16 knots. Other ports they load scrap iron for China as they cannot produce enough to meet their needs.

[NaultD]

There's a debate on prices, who should determine the price of goods? The buyer who works over the cash or the worker who actively creating the goods or services. Classic class divide of bourgeoisie vs proletariat and a discussion should be had.

These tariffs are completely ass backwards like having your cake and eating it too. Usa is the richest country to ever exist. We dominate the global market by spending ungodly about of money. We want control of prices by how much we spend. This makes tariffs losing game making things more expensive to taxes and not actually controlling the prices of goods.

While a more proletariat worker/ communist economy would benefit from tariffs. The worker is setting the expectations and costs and getting there fair share while the government takes there tax share from the buyer.

https://youtube.com/shorts/hypidSghUZk?si=C67g45S8TAHkTMbFhttps://www.youtube.com/embed/8wVl14Tb4eo

With these short videos in mind. Usa is already the railroad monopoly of trade globally. The tariffs is a way to get down to the last cent possible away from the working class people who make things.

[Kelley1]

Prices are determined by buyers and sellers and the law of supply and demand. Those who create goods and services, indirectly affect price. It the price is high enough, they will keep creating more until there is oversupply and price falls. If the price is low enough, they will stop creating because they will not create at a loss. At least, not for long.

[NaultD]

That's the endless debate of the class divide. That's why we end up in all of our conflicts.

The dons tariffs is ass backwards because they want to have the cake being the global economy power that can buy anything and everything for cheap.

And eat the cake too by selling everything global at the highest prove possible.

So what the fuck are we doing? We can't both buy the cheapest goods possible while selling the highest profits possible. So what the actual fuck doing?

[Gwendoline]

I think so. In Europe and Asia for instance you don't see a lot of American cars on the road but here in the us interfered see a lot of VWs, Mercedes, range rovers, bmws, Toyota, Honda, mitsubishi, Hyundai, Nissan. China doesn't seem to allow free trade at all with anyone, they even will import a few examples of a product or even manufacturer a foreign product for a company and then reverse engineer the product and produce it themselves. The Honda Accord is a good example, the Chinese built a factory right beside honda's Chinese based factory and started to produce cars called Yonda.

That doesn't seem fair.

[Kelley1]

Balanced trade does not imply fair trade. If you buy a set of inferior quality tools at triple the market value because they look good but will not last, that is not fair trade, but it is trade. When the seller knows the value but the buyer doesn't, that can result in an unfair trade.

[Gwendoline]

When you employ protectionist policies in regards to trade, I mean if you won't allow certain manufacturers of say tools trade because of where they are manufactured

[lightbulb27]

If this argument is true then there should be no problem if US starts going to a trade surplus and they go into deficit, for about 10-20 years while we built up reserves and can spend that globally to secure positions in resource rich areas, like china has.

China is smart long term thinking and crafty. not a dragon, a snake. it's the year of the snake!

If you and I do trade and I continually have a surpless and you buy my widgets while your credit card goes up... you are happy as long as you are printing money and passing it out and everyone you control with it is happy. But when you realize you have to print money just to pay the interest, debt goes to 200% of your production, your finance guy starts to get worried... your currency gets more shaky... your standing in the world gets trouble trouble.

I think that's the issue... the system went to a level.

[Kelley1]

I pay someone to mow my lawn every two, I don't sell him anything. Therefore, every year, that is a trade deficit. According to you, it is a bad deal to pay someone to mow my lawn when he never buys anything from me.

[lightbulb27]

You are spending savings… usa been printing money to pay for lawn mowing… and parties. Once game goes too far it changes, always has.
there's legitimacy to both sides… its a debt based system to grow the economies. Maybe the probkem is none if us really know enough to alter it. Listen to some ray dalio a while and see if makes sense… more well read than we are.

[exitseven]

I do not know where this graph came from but I find it hard to believe that the trade deficit with China has gone down. I saw a chart today that showed how much in merchandise China exports from the US. Just Cell Phones were 30 billion dollars and how much The US exports to China. Soybeans were 4 Billion. China exported 5 times what the bought from the US.

[Kelley1]

How is that relevant? You must believe China burns the money they get from us.

[exitseven]

no China uses the money to buy farmland in the US and property near American military bases.

[Dargil]

President Trump will prevail On his economic and tariff policies. he already is. the man understands the art of the deal

[DJB72]

Please tell me you never studied economics