Tag: U.S. trade deficit

The Unintended Consequences of Trump’s Tariffs

Tariffs haven’t done much to shrink the U.S. trade deficit, and experts are warning about collateral damage.

President Donald Trump‘s ongoing effort to rewrite America’s role in several long-standing trade agreements appears to have done little to rein in the country’s ballooning trade deficit last year, as America’s goods imbalance clocked in at a record $891.2 billion.

Economists broadly agree that the trade deficit isn’t a particularly accurate indicator of economic health – and, in fact, many have argued that the deficit climbed in part last year because the U.S. performed so admirably in the face of global economic malaise. Continue reading “The Unintended Consequences of Trump’s Tariffs”

Trump Claims the U.S. Would Save Money Without Trade. That’s Not What a Trade Deficit Represents.

The following article by Linda Qiu was posted on the New York Times website July 26, 2018:

The president, in a speech in Illinois, escalated his misguided notion that a trade deficit means “lost” wealth into a claim an expert says “defies the most basic of economics.”

WHAT WAS SAID

“We lost $817 billion a year, over the last number of years in trade. In other words, if we didn’t trade, we’d save a hell of a lot of money.”

— President Trump, speaking in Granite City, Ill., on Thursday

THE FACTS

This is misleading.

Mr. Trump is exaggerating the United States’ trade deficit with the rest of the world, and grossly mischaracterizing what a trade deficit represents.

Over all, the United States ran a trade deficit in goods of $807 billion in 2017 and a trade surplus in services of $255 billion, for a net trade deficit of $552 billion. Over the past decade, the United States had a goods deficit of $724 billion and a net deficit of $518 billion — below Mr. Trump’s $817 billion figure.

What does this mean? Simply put, a trade deficit occurs when a country imports more goods and services than it exports to another. (It is also driven by a number of other economic factors like the growth rates of countries, the strength of their currencies and their savings and investment rates.)

View the complete article here.