Trump and team didn't send me the update from the negotiations yet - I'll keep you posted.
Economics Thread
- Thread starter sturg33
- Start date
Trump and team didn't send me the update from the negotiations yet - I'll keep you posted.
sturg33
I
a phone call being nice and asking pretty please
chop2chip
Well-known member
Thanks.. I appreciated your updates from the first time he delayed tariffs a month. It was good to know we got a border czar and commitment to move away from China. I'm hoping for more concessions this go around
acesfull86
Well-known member
[tw]1897721790572396879[/tw]
chop2chip
Well-known member
Yikes
I think trump just wants the W and isnt sure how to get there.
chop2chip
Well-known member
To tariffs? Respectfully disagree
If it was just Trump shooting from the hip during a speech or on social media, sure. I think we’ve all learned to ignore that. But he’s actually implemented policy that impacts Americans.
acesfull86
Well-known member
https://www.bloomberg.com/opinion/articles/2025-03-06/the-case-against-tariffs-is-getting-stronger?utm_source=website&utm_medium=share&utm_campaign=twitter?sref&sref=htOHjx5Y
Among President Donald Trump’s most frequently expressed views are that trade deficits are bad and tariffs are good. Given his recent actions and pronouncements, he also seems to believe that higher tariffs will lower the US trade deficit, as Americans businesses and consumers buy less from abroad.
Unfortunately, the truth here is bad news for Trump: Economists have long understood that higher tariffs do not, in general, reduce trade deficits. In fact, global data show that countries with higher tariffs actually have higher trade deficits.
The simplest problem is that many US exporters — Boeing, General Motors, Caterpillar, to name just a few — rely on foreign inputs. So if a tariff has to be paid on foreign steel or aluminum coming into the US, American exporters who use those materials face higher costs. That will hurt their international competitive position and in turn increase the US trade deficit.
It would be too hasty to conclude that high tariffs cause higher trade deficits, given the perennial distinction between causation and correlation. Still, it is difficult to spin the global data into the argument that high tariffs will help reduce the trade deficit.
The most important factors behind trade balances include savings decisions, fiscal policy, economic growth rates, wealth levels and demographic characteristics such as the age of the population. As economist Joseph Gagnon bluntly put it: “None of the studies found any role for trade barriers.”
Currency manipulation can be an important factor, and that has been a problem in the past with China. But it is not a problem right now; if anything, China is propping up the value of its currency. Nor is currency manipulation a problem with Canada, Mexico or the European Union, other targets of Trump’s tariffs.
Insofar as currencies do matter, currency appreciation is one very direct mechanism that limits the potential for tariffs to improve the trade balance. If a country slaps tariffs on imports, that does make those imports more expensive and thus lowers the demand for them. But then the value of the domestic currency will rise, which in turn makes it harder for domestic exporters. There is no guarantee that these effects will cancel each other out exactly, but it is difficult to get much of a trade balance boost through this mechanism, given these offsetting effects.
One mechanism often touted by Trump is that the mere threat of tariffs may induce a foreign business to invest and set up shop in the US. That can be true, but it shows once again that tariffs cannot be counted on to reduce trade deficits. If the foreign investment arrives, that means a capital inflow, boosting the value of the dollar. The net result is that exporting becomes harder for US companies, which hardly is the path to a lower trade deficit.
That scenario shows one of the contradictions behind Trump’s trade policy: The president wants more foreign direct investment and a lower trade deficit. Those two goals work against each other.
Along related lines, economists debate the extent to which government budget deficits and trade deficits are connected. Opinions differ, but a higher budget deficit can make a positive balance of trade harder to establish. An increase in the deficit leads to more government borrowing, which tends to boost real interest rates. That can lead to capital inflow from abroad, appreciating the dollar and again making life harder for US exporters.
That is another way in which different Trump policies work at cross-purposes. The Republican budget proposals under consideration all would lead to a considerable increase in the budget deficit, which could end up boosting the trade deficit.
Some international analysts suggest that the US trade deficit is forced on Americans by the industrial policies of other countries, notably China. America thus should adopt a stronger industrial policy of its own. But that is not a good strategy for limiting the trade deficit — in fact, it is a mirror image of the tariffs argument. For the same reason that domestic tariffs will not cure the trade balance, neither will domestic subsidies. The value of the dollar will adjust accordingly, and most of the complex, multiple forces behind the initial trade imbalance will remain in play.
—————
Trump shows zero understanding of any of this, yet we’re supposed to have faith in his ability to intervene in the global economy and guide us to a better outcome. Which is like trusting a contractor to build you a 10 story building even though he couldn’t pass a high school level math test.
Among President Donald Trump’s most frequently expressed views are that trade deficits are bad and tariffs are good. Given his recent actions and pronouncements, he also seems to believe that higher tariffs will lower the US trade deficit, as Americans businesses and consumers buy less from abroad.
Unfortunately, the truth here is bad news for Trump: Economists have long understood that higher tariffs do not, in general, reduce trade deficits. In fact, global data show that countries with higher tariffs actually have higher trade deficits.
The simplest problem is that many US exporters — Boeing, General Motors, Caterpillar, to name just a few — rely on foreign inputs. So if a tariff has to be paid on foreign steel or aluminum coming into the US, American exporters who use those materials face higher costs. That will hurt their international competitive position and in turn increase the US trade deficit.
It would be too hasty to conclude that high tariffs cause higher trade deficits, given the perennial distinction between causation and correlation. Still, it is difficult to spin the global data into the argument that high tariffs will help reduce the trade deficit.
The most important factors behind trade balances include savings decisions, fiscal policy, economic growth rates, wealth levels and demographic characteristics such as the age of the population. As economist Joseph Gagnon bluntly put it: “None of the studies found any role for trade barriers.”
Currency manipulation can be an important factor, and that has been a problem in the past with China. But it is not a problem right now; if anything, China is propping up the value of its currency. Nor is currency manipulation a problem with Canada, Mexico or the European Union, other targets of Trump’s tariffs.
Insofar as currencies do matter, currency appreciation is one very direct mechanism that limits the potential for tariffs to improve the trade balance. If a country slaps tariffs on imports, that does make those imports more expensive and thus lowers the demand for them. But then the value of the domestic currency will rise, which in turn makes it harder for domestic exporters. There is no guarantee that these effects will cancel each other out exactly, but it is difficult to get much of a trade balance boost through this mechanism, given these offsetting effects.
One mechanism often touted by Trump is that the mere threat of tariffs may induce a foreign business to invest and set up shop in the US. That can be true, but it shows once again that tariffs cannot be counted on to reduce trade deficits. If the foreign investment arrives, that means a capital inflow, boosting the value of the dollar. The net result is that exporting becomes harder for US companies, which hardly is the path to a lower trade deficit.
That scenario shows one of the contradictions behind Trump’s trade policy: The president wants more foreign direct investment and a lower trade deficit. Those two goals work against each other.
Along related lines, economists debate the extent to which government budget deficits and trade deficits are connected. Opinions differ, but a higher budget deficit can make a positive balance of trade harder to establish. An increase in the deficit leads to more government borrowing, which tends to boost real interest rates. That can lead to capital inflow from abroad, appreciating the dollar and again making life harder for US exporters.
That is another way in which different Trump policies work at cross-purposes. The Republican budget proposals under consideration all would lead to a considerable increase in the budget deficit, which could end up boosting the trade deficit.
Some international analysts suggest that the US trade deficit is forced on Americans by the industrial policies of other countries, notably China. America thus should adopt a stronger industrial policy of its own. But that is not a good strategy for limiting the trade deficit — in fact, it is a mirror image of the tariffs argument. For the same reason that domestic tariffs will not cure the trade balance, neither will domestic subsidies. The value of the dollar will adjust accordingly, and most of the complex, multiple forces behind the initial trade imbalance will remain in play.
—————
Trump shows zero understanding of any of this, yet we’re supposed to have faith in his ability to intervene in the global economy and guide us to a better outcome. Which is like trusting a contractor to build you a 10 story building even though he couldn’t pass a high school level math test.
Tapate50
Well-known member
I also mean not to pay attention to the short view, they can be relieved at any time
[tw]1898001630924005494[/tw]
Oh - the plan is for a North American manufacturing hub for the world and countering the CCPs power. Plan is clear as day and it’s working.
This is called a concession guys - any time you’re ready to admit your wrongness I’m here for it.
Oh - the plan is for a North American manufacturing hub for the world and countering the CCPs power. Plan is clear as day and it’s working.
This is called a concession guys - any time you’re ready to admit your wrongness I’m here for it.
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It’s sad - idealogues will always have blind spots despite what’s right in front of them.
Well - 3 regular 'free trade' absolutists entered the thread this morning to see real concessions given and the 3 didn't bother to respond.
Its been real guys!
Sorry its difficult to see long term strategy because you've been fooled into thinking your economic worldview is the only one.
WHAT CONCESSIONS!!!!
Its been real guys!
Sorry its difficult to see long term strategy because you've been fooled into thinking your economic worldview is the only one.
WHAT CONCESSIONS!!!!
Bloomberg article?
Man - It really gets to you guys on this topic.
Absolutely love it.
chop2chip
Well-known member
Happy to read if you post. It’s paywalled