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Old 03-06-2019, 09:09 AM
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US records highest trade deficit in history


https://talkingpointsmemo.com/edblog...e-deficit-ever

Biggest absolute number in history, biggest adjusted for inflation in at least 10 years. Trump is #1 in trade deficits!

I'd say this would be good fodder for political attacks against Trump, but based on polling, most of his supporters don't seem actually interested in any facts, preferring to just go by whatever Trump says. So I expect Trump will either deny this report from his own cabinet (and call it fake news) or insist that it's actually great news, despite his earlier harping on the size of the trade deficit. And this will be fine with most of his supporters, I imagine.

If anything, it shows, yet again, how utterly incompetent his administration in accomplishing presumably their highest priorities (based on his campaign).

Last edited by iiandyiiii; 03-06-2019 at 09:10 AM.
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Old 03-06-2019, 09:31 AM
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He'll say this justifies his tariffs even more.
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Old 03-06-2019, 09:57 AM
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Thanks Obama!
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Old 03-06-2019, 10:43 AM
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Yeah. iiandyiiii, you missed "blame Obama".
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Old 03-06-2019, 12:18 PM
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Originally Posted by iiandyiiii View Post
Biggest absolute number in history, biggest adjusted for inflation in at least 10 years. Trump is #1 in trade deficits!

I'd say this would be good fodder for political attacks against Trump,
Why?

Trump took office promising to cut taxes, slash regulations, and pursue policies that would support job growth and economic growth. By any measure, it's been a success. 7 quarters of economic growth above 2%, unemployment rate holding at a remarkably low level, stock market up, manufacturing doing well, and wages rising quickly. So to summarize it all in one quick statement, American are making lots and lots of money.

And what are they doing with that money? Well, they're doing lots of different things, but many of them are spending some of their money on buying stuff from foreign countries. Fancy cars from Europe, clothes from sweatshops in Asia, coffee and chocolate from South America and Africa, and all kinds of other stuff from all over the world. Thus we get an increasing trade deficit.

It's an obvious result of the roaring economy that we've enjoyed under Trump. Are the Democrats planning to attack Trump on the grounds that the economy is growing?
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Old 03-06-2019, 12:38 PM
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It's an obvious result of the roaring economy that we've enjoyed under Trump. Are the Democrats planning to attack Trump on the grounds that the economy is growing?
If we had a normal Republican president, you'd be right. But we don't.

The current occupier of the Oval Office, unindicted co-conspirator Donald John Trump, is clueless about trade and trade deficits. He thinks that a big trade deficit means the United States is losing. Are any of the sycophants around him going to tell him he's wrong about that? Would he listen if they did?

Every time some news article links him and the largest trade deficit, he will feel like a loser. Every time he goes off-script about the trade deficit, he'll react like a loser. Sometimes his disconnect with reality helps Republican politics; this is a case where it hurts them. It can only help Democrats to bring up the large trade deficits every chance they get.
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Old 03-06-2019, 01:04 PM
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Originally Posted by ITR champion View Post
Why?
Because he very specificially criticized the trade deficit and promised to reverse it.
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Old 03-06-2019, 01:23 PM
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Why?

Trump took office promising to cut taxes, slash regulations, and pursue policies that would support job growth and economic growth. By any measure, it's been a success. 7 quarters of economic growth above 2%, unemployment rate holding at a remarkably low level, stock market up, manufacturing doing well, and wages rising quickly. So to summarize it all in one quick statement, American are making lots and lots of money.

And what are they doing with that money? Well, they're doing lots of different things, but many of them are spending some of their money on buying stuff from foreign countries. Fancy cars from Europe, clothes from sweatshops in Asia, coffee and chocolate from South America and Africa, and all kinds of other stuff from all over the world. Thus we get an increasing trade deficit.

It's an obvious result of the roaring economy that we've enjoyed under Trump. Are the Democrats planning to attack Trump on the grounds that the economy is growing?
Some of that trade deficit is the result of Trump's tax cut last year, which brought in foreign investment. Tax cuts also spike domestic demand, which makes domestic products more expensive relative to foreign goods of similar value. The repatriation of corporate earnings did, in fact, occur as a result of the tax cuts, but there's no evidence that the money has been used to boost American employment. What is evident, however, is that we have a record trade deficit at a time we have a record budget deficit -- party like it's 2005.
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Old 03-06-2019, 01:31 PM
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Originally Posted by ITR champion View Post
Why?

Trump took office promising to cut taxes, slash regulations, and pursue policies that would support job growth and economic growth. By any measure, it's been a success. 7 quarters of economic growth above 2%, unemployment rate holding at a remarkably low level, stock market up, manufacturing doing well, and wages rising quickly. So to summarize it all in one quick statement, American are making lots and lots of money.

And what are they doing with that money? Well, they're doing lots of different things, but many of them are spending some of their money on buying stuff from foreign countries. Fancy cars from Europe, clothes from sweatshops in Asia, coffee and chocolate from South America and Africa, and all kinds of other stuff from all over the world. Thus we get an increasing trade deficit.

It's an obvious result of the roaring economy that we've enjoyed under Trump. Are the Democrats planning to attack Trump on the grounds that the economy is growing?
Trump on trade deficits:
Quote:
Originally Posted by Presidential Candidate Donald Trump
Trade reform and the negotiation of great trade deals is the quickest way to bring our jobs back to our country.

To understand why trade reform creates jobs, and it creates a lot of them, we need to understand how all nations grow and prosper. Massive trade deficits subtract directly from our gross domestic product. From 1947 to 2001, a span of over five decades, our inflation-adjusted Gross Domestic Product grew at a rate of 3.5 percent. However, since 2002, the year after we fully opened our markets to Chinese imports, the GDP growth rate has been cut in half.

But is this mean for Americans? Not good. For every 1 percent of GDP growth, we failed to generate in any given year, we failed to create over one million jobs.

What a waste, and what a sad, sad thing.
Maybe Trump is some sort of idiot savant at economic policy. He's growing the economy, but he has no idea how! Or maybe our current economic conditions still don't really have that much to do with the Trump Administration's policies; which, apart from a giant tax cut--and concomitant enormous increase in the federal budget deficit*--haven't really amounted to much. (I don't actually think either Republican or Democratic, conservative or progressive Presidents have some kind of magical "GROW JOBS" button on their desks in the Oval Office, right next to the "LAUNCH THE NUKES" button--don't get those two buttons mixed up, guys!)

*In that same speech Candidate Trump complained about our "massive budget deficit"; now our course the federal budget deficit is even massive-er.
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Old 03-06-2019, 01:53 PM
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I mostly agree with ITR. The economy Is doing pretty well. But it is worth noting

-Trump tilted at the windmill of trade deficits Big Time. He started a trade war, including with Canada on national security grounds (!), the effects of which I don't think have fully played out. But without cracking the trade deficit. Some speculate he is using exemptions to tariffs as goodies he corruptly hands out to favored entities.

-The tax cuts help those that need it least, in exchange for ballooning the deficit which is in turn goading the Fed to raise rates. Spoiler, the theme here is "effects have not fully played out." The 10+ years of expansion is characterized by, among other things, loose Fed policy. Under Trump, that is changing.

-The stock market is out of step with fundamentals:
https://www.cnbc.com/amp/2019/03/05/...t-stories.html
Things are still going OK, but the market is running away from economic indicators. Eventually something has to give. Careful hanging your hat on the stock market!

We can't credit Trump too much until he is in retrospect. Current conditions seem like a continuation of previous trends. The changes Trump has introduced carry consequences that... Wait for it... haven't fully played out yet.
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Old 03-06-2019, 02:13 PM
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Why?
Remember when Obama said you could keep your doctor after the ACA was passed? And when some people had to change due to their really terrible "insurance", R's harped on it until yesterday (I haven't heard it yet today, but the day is still fairly young).

Trump has already bragged how much the trade deficit has fallen:

https://www.youtube.com/watch?v=PIMQeB7cg88

Maybe he should've talked to someone about what might actually happen. Oh wait, he's the smartest person on the planet.
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Old 03-06-2019, 02:18 PM
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IIRC Paul Krugman has called the trade deficit a bigger problem than the federal government deficit.

As I wrote in another recent thread, the U.S. Dollar will continue to be the world's safe haven currency. Until suddenly it isn't.
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Old 03-06-2019, 02:53 PM
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Septimus, can you say more or post a link about why the trade deficit is That big a deal? I thought it wasn't
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Old 03-06-2019, 03:43 PM
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IIRC Paul Krugman has called the trade deficit a bigger problem than the federal government deficit.

As I wrote in another recent thread, the U.S. Dollar will continue to be the world's safe haven currency. Until suddenly it isn't.
Krugman will say whatever is politically expedient. In any case, budget deficits arenít something he worries about anyway.

Trade deficits may be a signal the economy is being manipulated by the government, but do not matter per se despite what Trump and Krugman say.
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Old 03-06-2019, 04:34 PM
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By itself, neither a surplus nor a deficit in trade (or the current account more generally) is good or bad. In fact, the current accounts of all the world's countries will sum to zero, so if some countries are running surplus, some will have to run deficit. However
(1) A continual current account deficit is unsustainable in the very long term. If a weakening dollar causes the U.S. to lose its allure as an investment haven, a vicious cycle could ensue.
(2) It is logical that developed countries should save and invest some of the savings in developing countries; this is especially true when the savings are needed to fund future retirements. This is why the non-Anglophonic developed countries ó Germany, Switzerland, Holland, Japan, etc. ó run large surpluses. The U.S. also ran surpluses until about 1982. But now, instead of U.S. capital flowing to opportunities in developing countries, U.S. people spend instead of save, and money from developing countries flows to the U.S. Much of this foreign "investment" in the U.S. just fuels asset price inflation.

Asset price inflation is seen in today's high prices for stocks, bonds, and homes. Will the bubble burst, or will it fizzle sedately and safely? Nobody knows for sure.
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Old 03-06-2019, 05:52 PM
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Originally Posted by ITR champion View Post
Why?

Trump took office promising to cut taxes, slash regulations, and pursue policies that would support job growth and economic growth. By any measure, it's been a success. 7 quarters of economic growth above 2%, unemployment rate holding at a remarkably low level, stock market up, manufacturing doing well, and wages rising quickly. So to summarize it all in one quick statement, American are making lots and lots of money.

And what are they doing with that money? Well, they're doing lots of different things, but many of them are spending some of their money on buying stuff from foreign countries. Fancy cars from Europe, clothes from sweatshops in Asia, coffee and chocolate from South America and Africa, and all kinds of other stuff from all over the world. Thus we get an increasing trade deficit.

It's an obvious result of the roaring economy that we've enjoyed under Trump. Are the Democrats planning to attack Trump on the grounds that the economy is growing?
Ah, so unlike 2 years ago, trade deficits are a GOOD thing! Like the skyrocketing debt and deficit!


IOKIARDI in its most hypocritical glory.
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Old 03-07-2019, 12:05 AM
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Originally Posted by Try2B Comprehensive View Post

-Trump tilted at the windmill of trade deficits Big Time. He started a trade war, including with Canada on national security grounds (!), the effects of which I don't think have fully played out. But without cracking the trade deficit. Some speculate he is using exemptions to tariffs as goodies he corruptly hands out to favored entities.
Yes, in addition to declaring your NORAD/NATO partner to be a threat to national security, Trump has also been granting exemptions from his tariffs on steel and aluminium which he imposed on Canada and others, apparently as part of his trade war with China.

Guess who's been benefitting from most of the exemptions? Chinese steel and aluminium exporters. Canadian steel and aluminium exporters, on the other hand, are finding it very difficult to get exemptions.

So that tariff war with China is looking as odd as almost everything else he introduces.

U.S. steel tariff 'boondoggle' offers more exclusions to China than Canada

Quote:
If the Trump administration's tariff policy is meant to target unfair Chinese trade, it sure has a funny way of going about it.

So far, the U.S. Department of Commerce has excluded about 40 per cent of imports of Chinese steel from facing its 25 per cent tariff. But to date, only two per cent of the total volume of Canadian steel imports to the U.S. has been cleared to dodge the tariff.

The head-scratching discrepancy gets even stranger with the United States' 10 per cent tariff on aluminum imports.

About 86 per cent of Chinese aluminum imports now enter the U.S. tariff-free, while less than one per cent of Canadian aluminum shipments do.

"If the whole point was to do this for China in the first place, then why are the approval rates for China so much higher than other countries?" said Christine McDaniel, a former White House economic adviser, now a senior research fellow with the Mercatus Center at George Mason University.
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Old 03-07-2019, 12:44 AM
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Because he very specificially criticized the trade deficit and promised to reverse it.
And so what? Nobody who's watched Trump for the past four years expects consistency from him. He promised that Mexico would pay for the border wall. Then he shut down the government and vowed he would keep it closed for years, until Congress agreed to make the American taxpayers pay for the wall.

Better question: what makes anyone think that when Trump says "A", and then later says "not A", it will actually help the Democrats deal with him?
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Old 03-07-2019, 01:10 AM
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Yes, in addition to declaring your NORAD/NATO partner to be a threat to national security, Trump has also been granting exemptions from his tariffs on steel and aluminium which he imposed on Canada and others, apparently as part of his trade war with China.

Guess who's been benefitting from most of the exemptions? Chinese steel and aluminium exporters. Canadian steel and aluminium exporters, on the other hand, are finding it very difficult to get exemptions.

So that tariff war with China is looking as odd as almost everything else he introduces.

U.S. steel tariff 'boondoggle' offers more exclusions to China than Canada
Tangible results do not matter. It's all about image to him and his ilk. He kicked China in the balls and then turned around and kicked the fereral government in the ass. Like in an action movie - they only see the massive explosions, not the clean up crew hard at work afterwards.
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Old 03-07-2019, 04:41 AM
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US records highest trade deficit in history


It probably should have been expected. The 2017 tax cuts boosted individual and corporate post-tax incomes in 2018, which meant a boost to overall demand. That demand increased overall spending, not just domestic spending. So with a US increase in imports, and exports essentially neutral, it was natural for the trade deficit to go up.

Another factor was the nature of the tariffs the government imposed. The tariffs weren’t limited to finished goods, but also included materials, most famously steel and aluminium, and parts. That meant increased costs for domestic goods would be an offset to the higher costs of imported goods. Also, the tariffs weren’t global, but targeted at China and the EU (and somewhat Canada and Mexico). That meant that overseas buyers could shift their purchases to countries unaffected by the tariff increases. Likewise, the targeted countries imposed counter-tariffs which also raised the cost of exported American goods. Finally, the income from the tariffs, as far as I’m aware, wasn’t directed to programs to boost American production such as research and development, infrastructure improvement, or efficiency measures. Even if some was, those programs would have long-term effects, not short-term.

And while I was double-checking a couple of items in Wikipedia, I can see that several economists did predict higher trade deficits from the tax cuts.
https://www.nytimes.com/2017/11/17/u...cit-trump.html
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Old 03-07-2019, 12:08 PM
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Why [is] the trade deficit is That big a deal? I thought it wasn't
The US is big enough that it doesnít need to trade. It could easily sustain itself as a closed economy. The reason the US trades with other economies is that it benefits from trade. The benefits are diverse, but the biggest economic factor is that trade allows the US to send low-value economic activity overseas, and concentrate on high-value economic activity. If the gain from concentrating on the high-value activity is greater than the amount paid overseas for the low-value activity, then the US wins from trade, even if itís buying more low-value activity than itís selling high-value activity.

The first caveat to the above paragraph, is that when the US pays for low-value activity, itís not paying directly with high-value activity but with wealth. So if overall wealth is increasing due to the gain mentioned above, the payments out donít matter. However, if outward payments are greater than the internal gains, then the US is losing wealth. A long-term prolonged loss of wealth will eventually result in a shrinking economy, and the greater the wealth loss before the tipping point is hit, the severer the impact.

The second caveat is that net economic gain isnít uniform across the country. So, for example, the US software industry has undoubtedly been doing well, but bicycle manufacturing hasnít (https://aushiker.com/where-was-my-bicycle-made/ ). If the gains are concentrated, but the losses are dispersed, then there could be an average gain, but a median loss. In other words, itís possible that the winners are doing well, but there are more losers than winners. That also has long-term implications that will eventually result in a shrinking economy.
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Old 03-08-2019, 11:39 PM
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Thanks for the answer.
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Old 03-09-2019, 12:30 PM
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Because he very specificially criticized the trade deficit and promised to reverse it.
Haven't you learned that you cannot cite facts to Trumpers?

Of course, The economy was going down the tubes under Obama and Trump turned that around, right? And don't just blame Obama, it was mainly Hillary's fault.
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Old 03-09-2019, 01:07 PM
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IIRC Paul Krugman has called the trade deficit a bigger problem than the federal government deficit.

As I wrote in another recent thread, the U.S. Dollar will continue to be the world's safe haven currency. Until suddenly it isn't.
I yesterday's Times, he thought it was no big deal, except as another indication of how little Trump is actually concerned with the trade deficit, except as a talking point.
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Old 03-24-2019, 06:27 AM
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Think how much better you'd be doing under an intelligent president, and without the pending disaster that'll hit only after this clown is out of office.
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Old 03-24-2019, 06:32 AM
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Krugman will say whatever is politically expedient.
I'd be interested in seeing what you have to back up that statement.
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Old 03-24-2019, 07:58 AM
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I'd be interested in seeing what you have to back up that statement.
When Krugman was expecting a Clinton victory, he continued his call for deficit spending. As soon as Trump won, he said "deficits matter again."
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Old 03-24-2019, 09:11 AM
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Krugman called for a blanket 25% charge on Chinese imports.

“But if sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action — except that this time the surcharge would have to be much larger, say 25 percent.”

https://www.nytimes.com/2010/03/15/o...15krugman.html
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