are other countries really "ripping us off"?

[diamenz]

Trump's Absurd Trade Policies Will Impoverish Americans and Harm the World

U.S. President Donald Trump is trashing the world trade system over a basic economic fallacy. He wrongly claims that America’s trade deficit is caused by the rest of the world ripping off the U.S., repeatedly stating things such as, "Over the decades, they ripped us off like no country has never been ripped off in history…”

Trump aims to close the trade deficit by imposing tariffs, thereby impeding imports and restoring trade balance (or inducing other countries to end their rip-offs of America). Yet Trump’s tariffs will not close the trade deficit but will instead impoverish Americans and harm the rest of the world.

A country’s trade deficit (or more precisely, its current account deficit) does not indicate unfair trade practices by the surplus countries. It indicates something completely different. A current account deficit signifies that the deficit country is spending more than it is producing. Equivalently, it is saving less than it is investing.

America’s trade deficit is a measure of the profligacy of America’s corporate ruling class, more specifically the result of chronically large budget deficits resulting from tax cuts for the rich combined with trillions of dollars wasted on useless wars. The deficits are not the perfidy of Canada, Mexico, and other countries that sell more to the U.S. than the U.S. sells to them.

To close the trade deficit, the U.S. should close the budget deficit. Putting on tariffs will raise prices (such as for automobiles) but not close the trade or budget deficit, especially since Trump plans to offset tariff revenues with vastly larger tax cuts for his rich donors. Moreover, as Trump raises tariffs, the U.S. will face counter-tariffs that will directly impede U.S. exports. The result will be lose-lose for the U.S. and the rest of the world.

Let’s look at the numbers. In 2024, the U.S. exported $4.8 trillion in goods and services, and imported $5.9 trillion of goods and services, leading to a current account deficit of $1.1 trillion. That $1.1 trillion deficit is the difference between America’s total spending in 2024 ($30.1 trillion) and America’s national income ($29.0 trillion). America spends more than it earns and borrows the difference from the rest of the world.

Trump blames the rest of the world for America’s deficit, but that’s absurd. It is America that is spending more than it earns. Consider this. If you are an employee, you run a current account surplus with your employer and a deficit with the companies from which you buy goods and services. If you spend exactly what you earn, you are in current account balance. Suppose that you go on a shopping binge, spending more than your earnings by running up credit-card debt. You will now be running a current account deficit. Are the shops ripping you off, or is your profligacy driving you into debt?

Tariffs will not close the trade deficit so long as the fiscal irresponsibility of the corporate raiders and tax evaders that dominate Washington continues. Suppose, for example, that Trump’s tariffs slash the imports of automobiles and other goods from abroad. Americans will then buy U.S.-produced cars and other merchandise that would have been exported. Imports will fall, but so too will exports. Moreover, new tariffs imposed by other countries in response to Trump’s tariffs will reinforce the decline in U.S. exports. The U.S. trade imbalance will remain.

While the tariffs will not eliminate the trade deficit, they will force Americans to buy high-priced U.S.-produced goods that could have obtained at lower cost from foreign producers. The tariffs will squander what economists call the gains from trade: the ability to buy goods based on the comparative advantage of domestic and foreign producers.

The tariffs will raise prices for automobiles and wages of automotive workers, but those wage hikes will be paid by lower living standards of Americans across the economy, not by a boost of national income. The real way to support American workers is through federal measures opposite to those favored by Trump, including universal health coverage, support for unionization, and budget support for modern infrastructure, including green energy, all financed with higher, not lower, taxes on the wealthiest Americans and corporate sector.

The federal government does not cover its overall spending with tax revenues because wealthy campaign donors promote tax cuts, tax avoidance (through tax havens) and tax evasion. Remember that DOGE has gutted the audit capacity of the IRS. The budget deficit is currently around $2 trillion dollars, or roughly 6 percent of U.S. national income. With a chronically high budget gap, the U.S. trade balance will remain in chronic deficit.

Trump says that he will cut the budget deficit by slashing waste and abuse through DOGE. The problem is that DOGE mispresents the real cause of the fiscal profligacy. The budget deficit is not due to the salaries of civil servants, who are being wantonly fired, or to the government’s R&D spending, on which our future prosperity depends, but rather to the combination of tax cuts for the rich, and reckless spending on America’s perpetual wars, U.S. funding for Israel’s non-stop wars, America’s 750 overseas military bases, the bloated CIA and other intelligence agencies, and interest payments on the soaring federal debt.

Trump and the Congressional Republicans are reportedly taking aim at Medicaid—that is, at the poorest and most vulnerable Americans—to make way for yet another tax cut for the richest Americans. They may soon go after Social Security and Medicare too.

Trump’s tariffs will fail to close the trade and budget deficits, raise prices, and make America and the world poorer by squandering the gains from trade. The U.S. will be the enemy of the world for the harm that it is causing to itself and the rest of the world.

[SouBeachTalents]

Trump said so, so yes.

[StickyWice]

https://www.allsides.com/news-source...ams-media-bias

Retard site

Explain why EU for many year charge America 10% tariff on car and America onwy 2.5%?

[TeflonDonTrump]

https://www.allsides.com/news-source...ams-media-bias

Retard site

Explain why EU for many year charge America 10% tariff on car and America onwy 2.5%?

Yup. very stupid article.

[StickyWice]

Yup. very stupid article.

Main audience op

Lots mouth breathing to copy and paste garbage

[diamenz]

https://www.allsides.com/news-source...ams-media-bias

Retard site

Explain why EU for many year charge America 10% tariff on car and America onwy 2.5%?

Yup. very stupid article.

it's an opinion piece but by all means, shoot the messenger instead of discussing the matter at hand just to silence any criticism. because policy critique is now classified as TDS, isn't it.

Main audience op

Lots mouth breathing to copy and paste garbage

i thought you and i were on good terms, wf. you and i have always had respectful back & forths but now i guess it's a mutual "*uck you"? whatever dude.

[TeflonDonTrump]

it's an opinion piece but by all means, shoot the messenger instead of discussing the matter at hand just to silence any criticism. because policy critique is now classified as TDS, isn't it.



i thought you and i were on good terms, wf. you and i have always had respectful back & forths but now i guess it's a mutual "*uck you"? whatever dude.

I didn't say anything about you. I said its a stupid article.

[diamenz]

I didn't say anything about you. I said its a stupid article.

why is it "stupid"?

my second statement wasn't directed to towards you.

[TeflonDonTrump]

why is it "stupid"?

my second statement wasn't directed to towards you.

A graph would have sufficed

[Wardell Curry]

No, they aren't.

We aren't producing physical products nearly as much as we used to. We still do produce ideas, which is not to be understated.

And even if China surpasses us completely in influence and wealth, which they will, I doubt they will surpass us in ideas because of the natures of the two governments/countries/laws.

But yeah, Trump doesn't know what he's talking about. We're consuming a lot more than we produce.

Him saying that China needs to "fix their surplus" is one of the funniest and most ignorant things I've ever heard a president say. How is it their fault that we are mindlessly consuming and going into debt? We are just hanging ourselves. It isn't China's fault.

And you can blame corporations for outsourcing jobs to foreign nations but ultimately we are the ones buying the products because we want cheap stuff.

Blah blah, at the end of the day? Nobody truly believes or truly stands for anything. They just want whatever suits them at whatever given moment and that's it and then want to act surprised later on when their misbehavior blows up in their face.

[Neal Romer]

No, they aren't.

We aren't producing physical products nearly as much as we used to. We still do produce ideas, which is not to be understated.

And even if China surpasses us completely in influence and wealth, which they will, I doubt they will surpass us in ideas because of the natures of the two governments/countries/laws.

But yeah, Trump doesn't know what he's talking about. We're consuming a lot more than we produce.

Him saying that China needs to "fix their surplus" is one of the funniest and most ignorant things I've ever heard a president say. How is it their fault that we are mindlessly consuming and going into debt? We are just hanging ourselves. It isn't China's fault.

And you can blame corporations for outsourcing jobs to foreign nations but ultimately we are the ones buying the products because we want cheap stuff.

Blah blah, at the end of the day? Nobody truly believes or truly stands for anything. They just want whatever suits them at whatever given moment and that's it and then want to act surprised later on when their misbehavior blows up in their face.

Hey. Email me. BladeInAmerica@gmail.com

[TheMan]

Yup. very stupid article.

ISH two dumbest posters calling that article stupid is hilarious. Sit down warriorfan and BigKobeFan, your input lowers the IQ in every conversation here.

[TheMan]

OP, true...it's total bullshit that every country is ripping off the US. What I can't fully grasp is if Trump is just that moronic that he really believes that or that he's lying through his teeth knowing that simpletons like Hey Yo, warriorfan, BigKobeFan etc are too stupid to figure out they're being had.

[warriorfan]

Yes we subsidize european social programs by allowing them to spend little to nothing on defense while they expect us to clean up all of their mess.

Why do you think all the euros are all in on dying for ukraine? they want to keep america as their proxy from any actual conflict and responsibility aka spending so they can spend it on themselves (and then act snoody to americans on why they are enable to give free shit to their citizens. )

[warriorfan]

OP, true...it's total bullshit that every country is ripping off the US. What I can't fully grasp is if Trump is just that moronic that he really believes that or that he's lying through his teeth knowing that simpletons like Hey Yo, warriorfan, BigKobeFan etc are too stupid to figure out they're being had.

Rent free you dirty beaner. lmao. Hope you stay up all night next weekend venting about donald trump, it will totally make you less of a poor, self loathing mexican.

Keep up the good work amigo.