Posted on 08/09/2018 2:06:02 PM PDT by Kaslin
President Trump isn't going to be happy. The U.S. trade deficit expanded in June, at its fastest rate since November 2016. Also, $291 billion was added to that gap in the first six months of 2018, compared with $272 billion in the first half of 2017. And wait until he finds out that in spite of the tariffs he imposed on billions of dollars in imports, those imports grew slightly while exports are going down.
The administration's stated objectives for imposing tariffs on foreign imports is to reduce the trade deficit by reducing imports and forcing foreign governments to lower their "unfair" trade barriers so U.S. exporters will have more access to foreign markets.
It's true that if you impose hellish taxes on the goods and services that Americans buy from abroad, over time the higher prices will nudge consumers to shift their demands to the now-relatively cheaper American goods. In fact, this is what happened after the imposition of steel and aluminum tariffs on imports from China and many of our trading partners. The Department of Commerce reports that the steep hike in metal prices has resulted in a seasonally adjusted 19 percent reduction of iron- and steel-mill products imported in June and a 10 percent fall in imports of bauxite and aluminum.
Yet overall, imports have gone up slightly while exports have shrunk a bit, raising the trade deficit along the way. For one thing, contrary to the administration's promise, unilaterally raising tariffs on our trading partners hasn't resulted in better access to foreign markets for U.S. exporters. Instead, foreign tariffs have gone up and threats of retaliation continue.
That's true even for the European Union, which -- also contrary to the administration's claim -- hasn't yet agreed to stop its real or imaginary "unfair" trade practices against us. The EU has agreed, however, to go back to the negotiation table -- one that both sides left back in 2016 -- in hopes of ironing out their differences to allow better access to each other's markets. Until then, retaliatory tariffs are still up, and so are steel and aluminum taxes against EU producers.
The White House may be surprised by the recent developments, but economists aren't. First, tariffs are a tax on American consumers. Knowing that the price of goods they need to run their business will go up, companies often ramp up imports of targeted goods before the taxes take effect. Unfortunately, imports will decrease once companies are forced by higher costs to look for new suppliers. Higher production costs will hurt Americans the most, contrary to protectionists' claims.
Second, Trump is misinformed when he claims that the U.S. trade deficit is a sign that everyone is taking advantage of us. The reality is much more exciting, as it signals that the country is an attractive destination for foreign investors looking to make a profit. To the president's credit, his tax-reform and deregulatory efforts, and the resulting booming economy, have made the U.S. market even more appealing. These positive developments likely shifted foreign-owned dollars away from buying U.S. exports (especially when their prices have gone up due to retaliatory tariffs and a stronger dollar) and toward investments in the United States. Meanwhile, richer consumers can afford more expensive foreign imports. Et voila. You get more growth but also a larger trade deficit.
Unfortunately, things can sour pretty quickly. Total imports may eventually fall as a result of Trump's tariffs, and foreigners will have fewer dollars to invest in the United States, which hurts both investments and exports. The Tax Foundation estimates that the trade dispute could wipe out all of the previously projected benefits from tax reform. While the final impact on the trade deficit remains unclear, Americans will be worse off than they would have been without this trade.
Depends on who’s counting and where they’re fudging to make their political point.
So-called “Trumps Tariffs” have been limited to steel and aluminum, and starting in July, certain Chinese electronics and machinery.
Given the overall volume of American trade, the categories and amounts are tiny. They will be swamped by the overall strength of the American economy
So this article is really a faulty post-hoc analysis.
Larger tariffs, on China, may be coming in September or October. It will cover a much larger amount of imports - but still a tiny sliver of overall American trade. The article should focus on effects specifically related to Chinese trade, not overall American trade.
Trade wars are unpleasant.
However, change must happen.
We simply can’t have a majority of our voting population on government handouts.
Millions need to be removed from the welfare rolls and told to apply for jobs at the factories that US retail brand owners will need to build in towns across the USA.
The US government could refund tariff revenue via income tax refunds at say $X per exemption.
De rugy works for the mercatus center. From Wikipedia:
. Taking its name from the Latin word for “market”, the Center advocates free-market approaches to public policy. During the George W. Bush administration’s campaign to reduce government regulation, the Wall Street Journal reported, “14 of the 23 rules the White House chose for its “hit list” to eliminate or modify were Mercatus entries.”
So a bush loving free traitor wants to explain how tariffs are bad...got it...
As usual these free trade people only see people as consumers...but before one can consume, one must produce...and if ‘free trade’ is so wonderful, why is only the USA doing it...wouldn’t everyone else also be doing the same thing and getting all these magical benefits.
Second point...the NAFTA agreement was going to help Mexico become wealthier, which it has, but we’ve seen the biggest increase in illegals since the agreement...shouldn’t they have all stayed home?
Those old science fiction movies from the 1950s always came to a moment when someone says “don’t fight back, it only makes them stronger!”
That's a pretty convoluted way to distribute corporate welfare to a few favored industries.
Why not drop the market-distorting tariffs and just fund the handouts via the general fund?
Americans have lots of stuff.
They can largely sit out a trade war.
I’m not going to pay $140 for an item I’ll be able to get for $110 after the problems have been resolved.
How much do you really need to buy by August 2019?
Increased imports are due to faster growth in the overall economy. Conflicting factors at work. Reforming the trade climate after decades of being sold-out by corrupt politicians is not going to be a matter of instant gratification.
In the short term other countries will try to retain or restore the corrupt ‘norm’ by imposing additional tariffs, but in the long term they can’t win because the US economy is bigger than the other members of the G8 combined. Time is on our side.
She’s completely pulling stuff out of her ass!
The trade deficit in February was $55 billion. It narrowed in May to $43 billion... that’s 20% less. The slight slippage in June ... as Trump repealed his European tariffs, incidentally ... was only a small fraction of that advance.
Globalist free traitor B.S. The policy is only a few months old. In other news, if you take an antibiotic pill, the infection takes more than 5 minutes to go away.
“’The US government could refund tariff revenue via income tax refunds at say $X per exemption.’”
“That’s a pretty convoluted way to distribute corporate welfare to a few favored industries.”
The term “$X per exemption” means per person claimed on a personal 1040/1040A/1040EZ tax form. Giving refunds to natural person taxpayers isn’t corporate welfare.
So...ah...the Chinese are totally cool with tariffs then?
NO, they are not. To assume we can’t reverse the trade deficit and stop bleeding money into China is defeatist. We can, and we will.
Economists don’t know jack.
https://www.ft.com/content/82ebed88-9ede-11e7-8cd4-932067fbf946
Statisticians are investigating the delicate matter of why the trade balance between the UK and the US does not balance.
At various times over the past decade, the UK and the US have both simultaneously recorded a trade surplus with each other. The discrepancy has become uncomfortable as the UK focuses on trade once it has left the EU and Donald Trump takes aim at the US’s trade deficits with other countries.
Last year, for example, the UK claimed a £10bn goods trade surplus with the US, according to official statistics, while the US said it had recorded a surplus of $1bn.
By the way, she’s a foreigner. Grew up and educated in Europe.
Our score card is not the barometer to watch. The target countries exports is the key to watch.
[Second odd article from town hall recently.]
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