Article: 5 Big Truths on Trade

[FillJackson]

Five Big Truths About Trade
In 2000, the U.S. jobless rate was 4%, despite a trade imbalance larger than today

[Dresta]

Yeah, yeah, record trade deficits = strength; becoming wholly reliant and dependent on other countries = strength.

Dat Orwellain Newspeak :bowdown:

[FillJackson]

Yeah, yeah, record trade deficits = strength; becoming wholly reliant and dependent on other countries = strength.

Dat Orwellain Newspeak :bowdown:
Would love to hear real criticisms.

[UK2K]

[QUOTE]4. Running an overall trade deficit does not make us

[FillJackson]

If we continue to run a trade deficit for, say, the next 20 years.

Is that a good thing, or a bad thing, in your opinion?
I don't think you can determine good or bad based on a single factor: trade surplus or trade deficit. That is, I think you can run a good trade deficit for the next 20 years or you can raise a bad trade deficit for the next 20 years.

I also don't know enough about trade to give a two sentence explanation on how the balance turns out right.

In general, I think trade might be good for America overall, lower cost of goods mean people are able to have more....your money goes farther. I think feel trade might be a boon overall to Americans, but it hits certain specific groups of workers hard, if your town depended on one big factory and it leaves, what next? If you're basically a very low-skilled worker and you are now completely globally, you're in a very bad spot. So how do you balance that with other benefits from free trade?

I also think that free trade gets the blame for other things that are going on in the economy. We still have a lot of factories in America, but in general they need less people because of technological innovations such as, robotics and automation.

[UK2K]

I don't think you can determine good or bad based on a single factor: trade surplus or trade deficit. That is, I think you can run a good trade deficit for the next 20 years or you can raise a bad trade deficit for the next 20 years.

I also don't know enough about trade to give a two sentence explanation on how the balance turns out right.

In general, I think trade might be good for America overall, lower cost of goods mean people are able to have more....your money goes farther. I think feel trade might be a boon overall to Americans, but it hits certain specific groups of workers hard, if your town depended on one big factory and it leaves, what next? If you're basically a very low-skilled worker and you are now completely globally, you're in a very bad spot. So how do you balance that with other benefits from free trade?

I also think that free trade gets the blame for other things that are going on in the economy. We still have a lot of factories in America, but in general they need less people because of technological innovations such as, robotics and automation.

Well, I admit, I'm not an expert on trade either.

However, even if goods do cost more (say, plastic bags for example), the fact that you now have X% more consumers (because the jobs are here and not overseas), you have X% more tax revenue (more workers = more taxes).

What I do know is that the buying power of the US dwarfs about every other country on earth (except China, who have sheer numbers, but their $4/week salary doesn't quite compare), so any tariff or restriction we put on trade is good for us. There are a lot more producers looking to sell their goods in the US, and if costs more to import those items, I bet they won't care one bit. Pay an extra 4% to import your product, or do without? To keep business going, they'll pay.

When you have the biggest chip count at the table, you have all the power. Right now, we have all the power, but we don't have leadership to take advantage of that.

[Nick Young]

KevinCuck attempting to drop some knowledge

[FillJackson]

When you have the biggest chip count at the table, you have all the power. Right now, we have all the power, but we don't have leadership to take advantage of that.
Seems like you're only talking one side of the ledger.

I sell to England, Canada, Australia, Hong Kong, India, etc.

If they retaliate, to our tariffs and add tariffs of their own, my goods cost more and I lose sales.

Overall US exports would go down. Exports count in balance of trade.

[FillJackson]

There's been a lot of talk recently about how trade with China is different from previous trade. (http://www.ddorn.net/papers/Autor-Dorn-Hanson-ChinaShock.pdf) That the size of China has distorts the usual balance and has hurt the US and previous assumptions on free trade are being reevaluated. Trade with China opened up around 2000.

[FillJackson]

But in relation to the current political debate, what Trump has been saying about China with regards to its currency is false. It was true back in 2006, but not any longer.

Trump has been claiming they have been keeping their currency artificially low. They are not doing this. They are trying to prop it up most recently.

[falc39]

But in relation to the current political debate, what Trump has been saying about China with regards to its currency is false. It was true back in 2006, but not any longer.

Trump has been claiming they have been keeping their currency artificially low. They are not doing this. They are trying to prop it up most recently.

Interesting that you only mention Trump saying this. Every major candidate in recent years from both sides of the aisle seemed to have used China as a scapegoat and make that dumb currency manipulation argument, Obama and Hillary included. Obama has shied away from it lately but Hillary did it most recently and the establishment republicans are no better either.