Given that just about everything else he says is a lot of bullshit, I am inclined to write this off as more of the same. That said, I would like to understand the concerns of a trade deficit. I know part of the deficit is because China keeps the Renminbi or Yuan or whatever it’s called artificially low.
Thanks,
Rob
Well, that’s poisoning the well from the start. If Mr. Trump came out in favour of kittens, kittens would be instantly denounced.
And also we would be assured of a sharp drop in his popularity to vanishing-point as for the last 3 months on-going.
I so hope he maintains his popularity as long as possible. The entertainment value has been priceless.
It’s the Yuan. I honestly don’t know what Trump has said that you are asking about. If it’s that China deliberately keeps it’s currency devalued, that’s true enough. They don’t officially have it tied to the dollar, but they kind of do…and recently they devalued it even more to boost their exports (more) to prop up a flagging economy. I think that this has bad implications for China long term, but they certainly are doing that and it hurts the US (as well as other countries) since it makes it harder for us to export goods and services to China, and makes Chinese exports even more attractive, hurting domestic companies from competing against them here or abroad.
But if you want to go into the specifics of what exactly Trump said that you question I think you’d get more meaningful responses. China is a perennial bugaboo for US politicians (warning, YouTube video with Trump saying ‘China!’ a lot :p) during election time…some of it has merit, but much of it really just reflects the politicians playing on the fears of the US electorate.
Trump has also said that China puts unfair tariffs on their imports while we let them ship stuff here for free. That’s more or less true, as far as I know. It’s pretty tough to get finished goods shipped into China. His answer is to apply a tariff on their exports coming here. Obviously, that would drive up prices here. Would it stimulate American manufacturing? Maybe. To be honest, a lof of manufacturing is already moving out of China to other Asian countries.
If Mr. Trump came out in favor of kittens, it would not be unreasonable to at least think a bit about what kittens have done to deserve denunciation.
To be clear, he keeps repeating the mantra that China is killing us on trade, Mexico is killing us on trade. I assumed he was talking about a trade deficit with Mexico. BTW, doesn’t NAFTA remove tariffs from trade with Mexico and Canada?
Thanks,
Rob
I’m not calling him that.
I hear he plans to come out in favor of a positive balance of trade for every country in the world.
That’s exactly the kind of outsider thinking that we need to shake things up in Washington:p
We should improve our balance of trade with Mexico and China. The route from that basis to a statement about Donald Trump being right is long and torturous at best, but more likely unnavigable.
He’ll get China to…um…build something…at China’s expense…that will, er, solve the problem. Just like the wall he will get Mexico to build to stop illegal immigration (and trade…or something)…
There are real issues that the US needs to deal with wrt China. Mexico too. But I seriously doubt that Trump has the answers, which are often very complex and resistant to simple or simplistic solutions. We can’t dictate to the Chinese that they MUST do this or that…and we can’t really do that to Mexico either. And often what politicians spout is simply unrealistic babble that appeals to ‘common sense’ but is useless in solving complex problems. I imagine that Trump’s are even more outside of reality than most. That’s why I was hoping for specifics from the OP because I really haven’t kept up with Trump’s patter on this or really any other subject since he’s such a buffoon.
Why?
Why does the United States specifically need a better balance of trade with those two countries?
Why not have a negative balance of trade with some countries and positive with others?
Does a country always need a positive balance of trade?
And if Obama came out in favor of kittens, Republicans would start throwing them into wood chippers.
It’s hard for me to get excited about trade balances. So the Chinese sell more to us than we sell to them because their labor is cheaper and they don’t care about environmental rules. Do we really want to compete with them in a race to the bottom?
Maybe Trump will get China to build a wall and pay for it. A HUGE wall- a GREAT wall.
I try to avoid listening to him too because it sounds like “Ein volk, ein reich, ein fuhrer”.
What I really hoped to do was learn whether or not I should care about US trade deficits and what if anything should be done about them.
Thanks,
Rob
The reason we import goods from China and Mexico is that they are able to provide those goods at a cheaper price than we can in America. The way Trump is proposing to end the trade deficit is to add tariffs to goods coming from those countries. This would make those countries’ goods more expensive. This would help domestic competitors while harming consumers.
If you think high prices for products are good then what Trump is saying makes sense, if you think low prices are good than what he is saying makes no sense.
When I go shopping I look for low prices so I think this makes no sense.
I get that.
I think what I don’t really understand is the idea that a trade deficit is effectively a debt. The way I read it years ago in an article in the Atlantic was that everyone in America owes everyone in China X where X was over $1000. Do I have that right?
Thanks,
Rob
Not just low prices. They can make products more efficiently than we can, so buying from them and using our resources on things we can be more productive on improves US productivity and our economy in the long run.
This means we have to work at being more productive and more competitive, but no one ever said competition was easy.
Oh, it’s easy, all right, our corporations just need to do what the Chinese manufacturers do – use what amounts to slave labor, and ignore environmental impacts. In fact our corporations do that now, but they do it by outsourcing/offshoring. Which is one of the things Donald seems to be complaining about . . . it is a puzzlement.
Can’t speak to the balance of trade with China, but the NAFTA treaty is a whole lot more favourable to the US than it is to Mexico - which allows the US to flood the Mexican market with cheap agricultural products (also guns), which causes unemployment in Mexico, which translates into desperate people crossing into the US to work for chump change picking the exact same shit they used to pick in Mexico for màs dinero.
The idea that Mexico of all places is profiting unduly off the sweat of laborious US brows is not just wrong, it’s profoundly bullshit-ly Wrong.