Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content

Trump's trade war is economic suicide


Recommended Posts

  • Replies 627
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

Fake News...Your going to have a problem when 2020 rolls around and more folks then ever will be Voting Donald J. Trump for the POTUS.... 

NOT A REPUBLICAN    NOT A REPUBLICAN  NOT A REPUBLICAN  NOT A REPUBLICAN    These LOOSERS are R.I.N.O.s and establishment HACKS.  THEY ARE ENIMIES of FREEDOM.

I think once the "free ride" ends the entire world economy will be better off. They have be slopping at our trough long enough.

Posted Images

Oh, Oh, Yota, a Red Rubymeister gave You a Red Ruby Citation for "Display Of Intellectual Speed And Power"!!! I gave You an Emerald and I hope You don't mind!!!

 

:lmao:       :lmao:       :lmao:

 

You know, Yota, it is so refreshing to see people like You (and notable others here at DinarVets) exercising Reason and Common Sense in such a consistent and articulated manner even with the baseless and senseless rhetoric by some notable posters.

 

These baseless and senseless rhetorical posters have no comprehension of what constituted The United States Of America with the associated Declaration Of Independence, Constitution TO INCLUDE The Bill Of Rights, Federalist Papers, AND Common Sense (written by Thomas Paine).

 

“A long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.” 
 Thomas Paine, Common Sense


“SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.” 
 Thomas Paine, Common Sense

 

“Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer.”
 Thomas Paine, Common Sense

 

“Men who look upon themselves born to reign, and others to obey, soon grow insolent; selected from the rest of mankind their minds are early poisoned by importance; and the world they act in differs so materially from the world at large, that they have but little opportunity of knowing its true interests, and when they succeed to the government are frequently the most ignorant and unfit of any throughout the dominions.” 
 Thomas Paine, Common Sense

 

“Common sense will tell us, that the power which hath endeavoured to subdue us, is of all others, the most improper to defend us.” 
 Thomas Paine, Common Sense

 

“Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise.” 
 Thomas Paine, Common Sense

 

“For all men being originally equals, no one by birth could have the right to set up his own family in perpetual preference to all others forever, and tho' himself might deserve some decent degree of honours of his cotemporaries, yet his descendants might be far too unworthy to inherit them.” 
 Thomas Paine, Common Sense

 

“Give me liberty, or give me death.” 
 Thomas Paine, Common Sense

 

https://www.goodreads.com/work/quotes/2548496-common-sense

 

Thank You, Yota, Sir, for all YOU do and the immense value YOU, Yota, add to DinarVets (along with other likewise posters) demonstrating Reason and Common Sense!!!

 

:tiphat:       :tiphat:       :tiphat:

  • Upvote 1
Link to post
Share on other sites
1 minute ago, Botzwana said:

I urge dems to read yahoo news.  Specifically the comments when it is an article bashing Trump.  98% of the comments mock the article and bring out facts destroying the dems.  You will begin to realize how most will vote Trump in the next election.

 

And the opposite is true in the comment section of articles stroking Trump's fragile ego.  True story.  :peace:

 

GO RV, then BV  

  • Thanks 1
  • Haha 1
  • Downvote 4
Link to post
Share on other sites

Consumers are paying more for products from recreational vehicles to soda as tariffs on metals and parts put pressure on U.S. manufacturers.

U.S. steel and aluminum prices are up 33% and 11% respectively since the start of the year, as producers and their customers began to price in the tariffs that the Trump administration first applied on foreign-made metal in March. Tariffs on a host of additional imported products from China this month have added costs for companies that use those components to assemble their products in the U.S.

“We’ve had to go to the market a bit more frequently and a bit more aggressively with some price increases as of late,” said Michael Happe, chief executive of recreational-vehicle manufacturer Winnebago Industries Inc. WGO, -1.67%   Winnebago wouldn’t say how much it has raised prices, and said it has made changes such as modifying RV floor plans to trim costs.

Consumer prices rose 2.9% in June from a year earlier, the Labor Department said, the highest rate in more than six years. Producer prices, a measure of what businesses are paid for goods and services, have also climbed to the highest level in years. The producer-price index rose 3.4% in June from a year earlier.

 

 

"We've only just begun"  The Carpenters

 

B/A

  • Upvote 1
  • Downvote 3
Link to post
Share on other sites

Billionaire industrialist Charles Koch, who leads a powerful policy and political network, said Sunday he worries President Donald Trump’s actions on trade and tariffs put the booming U.S. economy at risk of recession.

While saying it’s impossible to know for sure because the president’s trade policy remains fluid, Koch said the greater the level of trade restrictions, the greater the risk of severe economic fallout.

More from Bloomberg.com: Trump and Son at Legal Risk If Found Lying About Russia Meeting

“It depends on the degree,” he said in Colorado during a rare on-the-record meeting with reporters. “If it’s severe enough, it could.”

Koch said any protectionism at any level is very detrimental. “Every nation that’s prospered is one that didn’t engage in trade wars,” he said.

Trump has already imposed tariffs on steel and aluminum imports in the name of national security, as well as duties on certain Chinese products in response to allegations of intellectual property theft. That’s drawn retaliatory tariffs on soybeans and other U.S. goods in an escalating conflict, although Trump struck a truce with the European Union last week pending further negotiations.

Strong Quarter

The U.S. economy in the second quarter expanded at its strongest pace since 2014, the government reported on Friday. But many economists see growth tailing off from here, and the potential for a trade war are part of their assessments.

More from Bloomberg.com: Trump Says He Had ‘Very Nasty’ Relationship With Special Counsel

Charles Koch, 82, and brother David Koch, 78, didn’t support Trump in the 2016 campaign, but the network they built has since praised his administration’s efforts to cut taxes and regulations. A White House spokesman didn’t immediately respond to an email seeking comment.

In June, the Koch network said it was planning a “multi-year, multi-million-dollar” campaign to promote free trade and oppose Trump’s moves to impose tariffs. The effort is to include advertising, voter mobilization and lobbying.

More from Bloomberg.com: Mnuchin Outlook for Sustained 3% Growth at Odds With Forecasters

Koch’s comments came as network donors are gathered for a three-day meeting at a luxury resort in Colorado Springs that ends on Monday. The network, with more than 700 donors who give at least $100,000 per year, has convened such gatherings twice annually since 2003.

Midterms Approach

So far this weekend, the network sought to downplay its role in this year’s midterm congressional campaign, even as ads it paid for have hammered Democrats in battleground states. Planned spending on campaign-associated activities was prominent when the network last assembled in January.

Since then, analysts and polling have increasingly suggested Democrats have a good chance of winning control of the U.S. House in November’s midterm elections, in line with historical trends. The party needs a net gain of 23 seats to do that.

Speaking to reporters, Koch indicated a willingness to work with Democrats, so long as they embrace free-market solutions.

“I don’t care what initials are in front of after somebody’s name,” he said. “I would like there to be many more politicians who would embrace and have the courage to run on a platform like this.”

Koch also indicated he wants to have the network do a better job of holding Republicans accountable when they stray from what they’ve promised. The network is going to be “much stricter” in holding people it supports to their commitments, he said.

‘Irresponsible Budget’

That was a message Brian Hooks, president of the Charles Koch Foundation and Charles Koch Institute, shared with donors earlier in the day, as he criticized increased federal spending passed by Congress, where Republicans have a majority in both chambers.

“Many of you watched in disgust as the most fiscally irresponsible budget in the history of our country was passed in March under a Republican government,” Hooks said. “We supported the election of some of these guys that just voted for a $1.3 trillion federal spending bill.”

Hooks added: “People are taking us for granted, and so if we want things to change, we have to do things differently. No more waiting for others to set the agenda. This network has got to lead.”

Hate the Sin

 

While Hooks blamed Trump for the nation’s divisions a day earlier, Koch stopped short of that.

“We’ve had divisiveness long before Trump became president,” Koch said. “I’m into hating the sin, not the sinner.”

Some of the elected officials attending the gathering include Governor Rick Scott of Florida, who’s running for U.S. Senate; Kentucky Governor Matt Bevin; Senator John Cornyn of Texas; Senator Tim Scott of South Carolina; Representative Marsha Blackburn of Tennessee, who’s running for U.S. Senate; Representative Doug Collins of Georgia; and Nevada Attorney General Adam Laxalt, who’s running for governor. All are Republicans.

Plans call for the network to spend about $400 million on state and federal policy and politics during the two-year cycle that culminates with November’s balloting, a 60 percent increase over 2015-16. Besides trying to influence electoral politics, the network also works on education, criminal justice, workforce and poverty issues.

  • Thanks 2
  • Downvote 3
Link to post
Share on other sites

Coca-Cola has hiked prices on its carbonated drinks because President Donald Trump’s 10 percent tariff on imported aluminum has made cans for Coke and other sodas more expensive to make.

The price boost for Coke, which Trump loudly ordered during a secretly recorded conversation with his former personal attorney Michael Cohen, was “disruptive” but necessary given the extra cost of the tariffs, Coca-Cola CEO James Quigley said. Specific increases will depend on individual stores, a company spokesman told CNN Money

This increase is just one of a number of price hikes on goods ― including boats, motorcycles, campers, furniture and beer ― bringing the high cost of the tariffs home to American consumers.

“We’ve had to go to the market a bit more frequently and a bit more aggressively with some price increases as of late,” Michael Happe, CEO of recreational-vehicle manufacturer Winnebago Industries, told The Wall Street Journal.

Although Happe wouldn’t provide specifics on Winnebago price hikes, he said the company remains concerned about the tariffs, a murky future in trade tensions and increasing inflation.

“Uncertainty is never a great thing for the economy and the more noise there is there’s a risk that consumers will press pause,” he said.

According to the Labor Department, consumer prices rose 2.9 percent in June from a year earlier, the highest rate in more than six years. Producer prices have also climbed to the highest level in years.

In a CNBC interview last March, Commerce Secretary Wilbur Ross held up a Coke, a Budweiser and a can of Campbell’s soup in a bid to make the point that tariffs are “nothing” and that consumers wouldn’t notice. He predicted the price of a can of soup would increase about “six-tenths of a cent,” adding: “Who in the world is going to be too bothered by six-tenths of a cent?”

The Beer Institute, a trade group representing beer producers, estimated that the aluminum tariff would cost brewers $348 million and could lead to the loss of more than 20,000 jobs in the industry.

On Sunday, Charles Koch, libertarian megadonor to Republicans, attacked Trump’s “protectionist” tariffs that he said destroy businesses and threaten another recession

  • Haha 1
  • Downvote 1
Link to post
Share on other sites

Chinese yuan widens losses at 13-month low

Chinese yuan widens losses at 13-month low


 30 July 2018 03:33 PM
Direct : China 's yuan fell against the US dollar at the lowest level in 13 months during trading on Monday, with the reduction of the reference currency and the continuing trade crisis with Washington price.

The People's Bank of China lowered the yuan's benchmark against the dollar today at 6.8131 yuan, against Friday's 6.7942 yuan.

By 1110 GMT, the yuan fell about 0.1 percent to 6.8219 yuan, the lowest level since June 27 last year.

China's foreign minister on Monday blamed US policy on Washington 's trade deficit and the collapse of talks with his country, stressing the idea that the United States had benefited from the deficit.

Wang Yi believes that the United States has benefited by acquiring huge and inexpensive resources and goods, "which increases the welfare of consumers and the strength of the dollar."

At the same time, the Chinese official stressed that the door of dialogue and negotiations is still open, "but any negotiations should be based on mutual and equal respect."

 
  • Like 1
  • Upvote 1
Link to post
Share on other sites
6 hours ago, bostonangler said:

Coca-Cola has hiked prices on its carbonated drinks because

in the last 20 years we been raising the price, heck the smaller the product the higher the price we sell it, and most folks will still buy it. 

  • Like 1
  • Upvote 4
Link to post
Share on other sites

Caterpillar Price Hike Lobs Tariff Costs to its Customers

 

Caterpillar Inc (NYSE:CAT).’s efforts to skirt the effects of tariffs could signal higher costs for miners, construction companies and other customers.

The maker of yellow bulldozers and backhoes said when it reported second-quarter earnings Monday that recently imposed tariffs “are expected to impact material costs in the second half of the year by approximately $100 million to $200 million.” The Deerfield, Illinois-based manufacturer plans to raise prices to help offset the hit.

“We have the mid-year price increase announced and our teams will continue to look at all these variables moving forward,” Interim Chief Financial Officer Joe Creed said in a telephone interview. “We feel like that’s what the market will bear, but we’re always assessing it and looking at it.”

Surging demand and a 25 percent American tariff on steel imports have combined to send the benchmark steel price in the U.S. surging about 40 percent this year.

“The biggest piece of that cost inflation is likely steel, and we all know what happened there with the very first salvo of tariffs involving steel,” Matt Arnold, an analyst at Edward Jones & Co., said by telephone. “In the past, what we’ve seen is that CAT is capable of passing costs through to its customer base, so it’s not surprising to us that CAT is able to do it again. It has already likely provided that information to its customers that they’re coming.”

Caterpillar boosted its 2018 earnings outlook Monday as it benefits from rising sales and a years-long effort to increase efficiency, even as it said it expects supply-chain “challenges” to continue to pressure freight costs.

 

  • Thanks 1
  • Downvote 1
Link to post
Share on other sites

Tyson shares dive more than 7% after the company cuts profit outlook because of tariffs

Shares of Tyson fell 7.6 percent to a 52-week low Monday after the food company cut its full-year guidance on trade worries related to the Trump administration's imposition of tariffs and a turbulent commodities market.

The international food company now expects adjusted earnings for fiscal year 2018 at approximately $5.70 to $6.00, down from a range of $6.55 to $6.70.

"The combination of changing global trade policies here and abroad, and the uncertainty of any resolution, have created a challenging market environment of increased volatility, lower prices and oversupply of protein," said Tom Hayes, Tyson Foods president and chief executive officer. "We will continue to watch these conditions carefully."

 

The company, which raises and processes chicken, pork, beef and prepared foods, detailed its reasons for providing investors with an update for the fiscal year in a press release dated July 30. According to the document, the primary drivers for the reduced guidance are:

  • "Uncertainty in trade policies and increased tariffs negatively impacting domestic and export prices - primarily chicken and pork"
  • "Increased volatility in the commodity markets resulting in a greater than expected increase in the domestic supply of proteins and lower sales prices"
  • "Sluggish domestic chicken demand due to such pricing of competing proteins"
  • "Pork margin compression driven by an imbalance in supply and demand"
  • "A benefit from tax reform of about $0.77 per share vs. a previous projection of $0.85 cents per share."

The United States has been embroiled in a growing ***-for-tat trade war in recent months as President Donald Trump's administration seeks to force economic partners like China, Mexico and the European Union into more favorable trade deals.

Following the White House's decision to slap duties on imported steel and aluminum, however, Mexico imposed a 10 percent tariff on chilled and frozen pork muscle cuts, which took effect June 5 and doubled to 20 percent earlier this month. Such tariffs have had a direct impact on the American agricultural sector as foreign governments take aim Republican-heavy electoral regions in an effort to pressure lawmakers into opposing Trump's actions.

China, meanwhile, started collecting an additional 25 percent import duty on $34 billion worth of U.S. goods in response to President Trump's actions against Beijing for intellectual property theft. The country's retaliatory measures include tariffs on soybeans, corn, wheat, cotton, whiskey and dairy. Nearly $20 billion in U.S. agricultural exports went to China last year, with the more than half of that amount coming from soybeans.

One in 4 hogs raised in the U.S. is sold overseas, and the Chinese are the world's top consumers of pork.

  • Thanks 1
  • Downvote 1
Link to post
Share on other sites
  • 2 weeks later...

Trump's China Tariffs Claim Another Victim: A South Carolina TV Manufacturing Plant

The tariffs imposed by President Trump have claimed more jobs, this time at a consumer-electronics manufacturing plant in South Carolina.

Element Electronics blamed tariffs on Chinese imports for its decision to shut down its manufacturing facilities in Winnsboro, SC, a town located about 30 miles north of the state’s capital. The plant, which makes Element TVs, will maintain a skeleton crew of eight workers, as it hopes the shutdown will be temporary.

The news is especially hard for Winnsboro and its surrounding communities because of recent job losses in the area, including the shuttering of a Walmart store, the closing of a textile mill, and the cancellation of plans to construct two nuclear reactors.

Element notified the state’s Department of Employment about its plans, according to Columbia-based The State newspaper, which first reported on the plant’s closing. In its notification, Element stated, “The layoff and closure is a result of the new tariffs that were recently and unexpectedly imposed on many goods imported from China, including the key television components used in our assembly operations in Winnsboro.”

In June, America’s largest nail manufacturer, Mid-Continent Nail, became the first company to lay off workers and cite tariffs as the reason. The company made nails with steel imported from Mexico. In early July, Washington-based REC Silicon, which makes polysilicon used in solar panels, laid off 100 employees as “a direct result of the ongoing solar-trade dispute between China and the US.”

Other companies and industry groups have warned that higher tariffs will lead to more job losses. The Solar Energy Industries Association estimated that another 23,000 jobs in the solar industry could be lost. And the U.S. Chamber of Commerce has argued that Trump’s trade actions could lead to 2.6 million American job losses in total.

Volvo is considering slashing jobs at its own manufacturing facility in Ridgeville, SC, after having just opened the plant in June. General Motors and BMW sent letters to the Commerce Department stating their concerns about higher job prices and lower production.

Harley-Davidson has also said it would move production of its Europe-bound vehicles offshore in response to a 31% tariff that the European Union imposed, which was itself retaliation against Trump’s tariffs on European steel.

Despite the closing of Element’s plant in South Carolina, Trump is pushing ahead with the imposition of new tariffs. The AP reported Tuesday that the Trump administration will go ahead with tariffs on $16 billion in Chinese imports beginning on August 23.

https://finance.yahoo.com/news/trump-apos-china-tariffs-claim-223207045.html

 

 

Timmmmmmmmber!

B/A

Edited by bostonangler
  • Thanks 1
  • Downvote 1
Link to post
Share on other sites
On ‎7‎/‎30‎/‎2018 at 7:34 PM, yota691 said:

in the last 20 years we been raising the price, heck the smaller the product the higher the price we sell it, and most folks will still buy it. 

If those here & MSM were honest .......they would have stated that NO ONE expected anything less at the beginning of the tariff wars. The goal is to get FAIR trade and in order to get that EVERYONE knew it was going to hurt. Give it time and see what occurs....this initial baby crying from the left & MSM will go away if Trump is successful. But of course that's what they DON'T want......smh

  • Upvote 1
Link to post
Share on other sites
On ‎7‎/‎30‎/‎2018 at 12:48 PM, bostonangler said:

Coca-Cola has hiked prices on its carbonated drinks because President Donald Trump’s 10 percent tariff on imported aluminum has made cans for Coke and other sodas more expensive to make.

The price boost for Coke, which Trump loudly ordered during a secretly recorded conversation with his former personal attorney Michael Cohen, was “disruptive” but necessary given the extra cost of the tariffs, Coca-Cola CEO James Quigley said. Specific increases will depend on individual stores, a company spokesman told CNN Money

This increase is just one of a number of price hikes on goods ― including boats, motorcycles, campers, furniture and beer ― bringing the high cost of the tariffs home to American consumers.

“We’ve had to go to the market a bit more frequently and a bit more aggressively with some price increases as of late,” Michael Happe, CEO of recreational-vehicle manufacturer Winnebago Industries, told The Wall Street Journal.

Although Happe wouldn’t provide specifics on Winnebago price hikes, he said the company remains concerned about the tariffs, a murky future in trade tensions and increasing inflation.

“Uncertainty is never a great thing for the economy and the more noise there is there’s a risk that consumers will press pause,” he said.

According to the Labor Department, consumer prices rose 2.9 percent in June from a year earlier, the highest rate in more than six years. Producer prices have also climbed to the highest level in years.

In a CNBC interview last March, Commerce Secretary Wilbur Ross held up a Coke, a Budweiser and a can of Campbell’s soup in a bid to make the point that tariffs are “nothing” and that consumers wouldn’t notice. He predicted the price of a can of soup would increase about “six-tenths of a cent,” adding: “Who in the world is going to be too bothered by six-tenths of a cent?”

The Beer Institute, a trade group representing beer producers, estimated that the aluminum tariff would cost brewers $348 million and could lead to the loss of more than 20,000 jobs in the industry.

On Sunday, Charles Koch, libertarian megadonor to Republicans, attacked Trump’s “protectionist” tariffs that he said destroy businesses and threaten another recession

Why hasn't the left or MSM complained before when these major companies jacked up pricing? Ohhhhhhh that's right....it's because of the HATE by the left, MSM & it's "sheep" of TRUMP, some of which reside here at DV   ........SMH 

  • Like 1
  • Upvote 1
Link to post
Share on other sites
On 7/26/2018 at 2:38 AM, ladyGrace'sDaddy said:

Di_TAQOWwAI5gMs.jpg

  1. Great meeting on Trade today with @JunckerEU and representatives of the European Union. We have come to a very strong understanding and are all believers in no tariffs, no barriers and no subsidies. Work on documents has already started and the process is moving...

     
  2.  

    kUuht00m_bigger.jpgDonald J. TrumpVerified account @realDonaldTrump 53m53 minutes ago

     

     

    along quickly. European Union Nations will be open to the United States and at the same time benefiting by everything we are doing for them. There was great warmth and feeling in the room - a breakthrough has been quickly made that nobody thought possible!
    More

    ...along quickly. European Union Nations will be open to the United States and at the same time benefiting by everything we are doing for them. There was great warmth and feeling in the room - a breakthrough has been quickly made that nobody thought possible!

 

True that that Mr. Juncker has this compulsion of wanting to kiss everybody all the time..... Females and males alike...Probably he's indeed full of love...In Brussels ( or  wherever he's at) he does it all the time....He's unstoppable.....Some folks started avoiding him whenever they see him approaching.....

Edited by umbertino
Link to post
Share on other sites

Jeeeese we "The USA ain't going down" ! Not now, not ever ! Not in your lifetime ! Libs get a f....N life ! Y'all are not in control anymore. Ever again in my lifetime! So what you say , it don't mean Diddley squat as anymore. Please sit back and enjoy the next Presidential election, while you get your assessment kicked again. Trump will prevail  ! and you slithering little snakes will fail ! Because you refuse to acknowledge main stream America. Q

  • Like 1
  • Upvote 1
Link to post
Share on other sites
3 hours ago, bigwave said:

We are a trillion in the hole every year and the USA will loose???????????????????????????????

Sounds like its time to at least try something different to stop the economic blood letting of the USA's economy. That is exactly what POTUS Trump is doing/trying. Obama 1.5 growth, Trump 4.12 % growth

  • Upvote 1
Link to post
Share on other sites

Want to help President Trump achieve his biggest goal on trade? Well, you can, by doing one simple thing: buy less and save more.

One of Trump’s top priorities is reducing the U.S. trade deficit, which was $552 billion last year. Trump has singled out China in particular, since that one country accounts for the bulk of America’s trade deficit with the world. In 2017, Americans bought $524 billion worth of Chinese stuff, while the Chinese bought only $188 billion worth of American goods and services. So the U.S. trade deficit with China was $336 billion.

Most economists say there’s nothing inherently wrong with a trade deficit. Americans pay dollars for stuff they want, and foreigners get dollars that they must invest somewhere—often, in U.S. assets like Treasury or corporate securities. But Trump sees it differently, and has made it a priority to reduce the U.S. trade deficit with China and other countries.

“We benefit from trade,” says economist Desmond Lachman of the American Enterprise Institute, a former deputy director at the International Monetary Fund. “The problem is there are people around Trump telling him that trade is a zero-sum game, that if you win, someone else loses.”

[Check out our Trump trade war scorecard.]

That’s why Trump has imposed tariffs on about $52 billion worth of Chinese imports, and threatened further tariffs on another $400 billion worth of Chinese stuff. Trump thinks taxing Chinese imports, and making them more expensive, will force Americans to buy more American-made merchandise and lure more producers to the United States. But that’s not the way trade works. “He is unlikely to achieve any of these objectives,” Dartmouth economist Douglas A. Irwin wrote recently. “His policies will likely be an exercise in frustration.”

There are ways to reduce the trade deficit, it turns out. But Trump isn’t pursuing them. The trade deficit exists because America as a whole spends more than it produces, and must therefore buy foreign products to meet domestic demand. Trade is complicated, but in general, countries with relatively low savings rates tend to have large trade deficits, while countries that save a lot—such as China, Germany and Japan—have surpluses.

As the following two charts show, the net savings rate in the United States has been on a downward trend since the mid-1960s, while the trade deficit has been generally rising. (Trade data are only available going back to 1992.)

3642858031235064f03ade812dff33a2
 
Sources: Bureau of Economic Analysis, St. Louis Federal Reserve
More
5730ee1fb4ec57fe708ede099057852d
 
Sources: Bureau of Economic Analysis, St. Louis Federal Reserve
More

National savings consists of three sectors: government, business and household. The federal government has been running annual deficits since 2002, and the Trump tax cuts that went into effect this year are pushing the annual shortfall close to $1 trillion per year. So U.S. government savings is solidly negative.

Business saving is a net positive, but it’s been declining since 2010, even as corporate profitability has steadily improved. And personal saving in the United States is low, with Americans banking just 6.4% of after-tax disposable income.

In a consumption-based economy such as America’s, less buying and more saving might sound like a bad thing. But saved money typically becomes investment, which generates economic activity, and, if done right, nets a positive return that helps build wealth.  China, by contrast, has one of the highest savings rates in the world, in part because there are minimal safety-net benefits such as Social Security and Medicare. So the Chinese sock money away to pay for their own retirement needs—and buy relatively few foreign products. The International Monetary Fund has actually lobbied China to implement policies that would reduce savings and boost consumption, to even out imbalances such as its huge trade surplus with the rest of the world.

 

Trump’s policies, ironically, may actually push the trade deficit higher, since the tax cuts and spending increases he signed will add substantially to deficits and push national saving lower still. “What Trump’s doing is just crazy,” says Lachman. “If he’s serious about wanting to reduce the trade deficit, he can’t then go and increase the budget deficit, because that’s reducing savings, which is going to increase our trade deficit. It’s just not going to work.” Trump’s not hearing it

  • Thanks 1
  • Upvote 1
  • Downvote 1
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.




×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.