09-03-2019, 11:24 PM
(08-28-2019, 01:34 PM)Benton Wrote: And that's how it has to work.
China isn't going to change if there's no reason to. But they have to have a lot of growth to maintain things. Cut into that growth and they're going to open a real conversation on how to make things work for wveryone.
Unfortunately, were doing it about two decades late, and we're not doing it with full support of our trade partners. But it's a start.
What do you make of this?--increasing deficit following tariffs, and one person claims this is partly the result of the tax cut, which has increased purchase of Chinese goods. Agree we should be working with trade partners, but not convinced just "doing something" is the right way to go. We need to know what we are doing.
Despite promises, Trump's trade deficits are only growing
https://www.axios.com/trump-trade-deficit-world-china-6c0e421a-872d-4232-951c-511e0c785f68.html
Why it matters: While economists agree that trade deficits aren't a good way to measure a trade relationship, they are the metric Trump fixates on, made campaign promises about and uses to evaluate relationships with other countries.
- Throughout his campaign, Trump vowed that he would wipe away the U.S.'s trade deficits: "You will see a drop [in the trade deficit] like you’ve never seen before.”
- While Trump can explain the deficit spike with China as a short-term sacrifice for long-term benefit, it doesn't account for the wider trend.
What's going on: Trump's tax cuts are as much to blame for the increase in the trade deficit as anything else, writes Axios Markets editor Dion Rabouin:
- More money in Americans' pockets leads to more consumption, often of Chinese-made goods.
- The tax cut helped boost the value of the dollar, which makes imports to the U.S. relatively cheaper.
- For example, you have a “trade deficit” with your local grocery: you give them money and get food in return.
![[Image: 4CV0TeR.png]](https://i.imgur.com/4CV0TeR.png)