Trade Wars versus Trade Deficits

If you think this is just completely meaningless and there is nothing to be said about it, then I truly wonder what you learned in economics.

 

The point was agriculture is not on this list...

 

100% conspiracy theory...

 

Point was imports are not only cheap crap...

 

Most of the countries where we get quality goods from, we don't have trade deficits with.

These trade deficits are not being caused by the import of high quality luxury items.

 

Actually, and I hate to have facts get in the way here, but automobiles are one of the driving import items...guess we can call them luxury since average price of a car today is around $35,000. Then there's petroleum products and consumer goods. US trade deficits are primarily with China, Canada and Mexico.

Ask yourself this question; If the US has the resources and capability to produce just about anything, then why do we have trade deficits? The answer might be because we don't wish to produce certain stuff, or, US products simply are not competitive. IMO punishing US imports with tariffs, which ultimately punishes the consumer, is not an answer to the above question...

 

Your game isn't difficult. I saw the same pattern, for example, with the NF and the BNP. Its pretend Economics, only intended to pursue a hidden agenda. No detail and careless with validity (e.g. your lack of understanding of comparative advantage). Economics ultimately isn't important to your argument...

 

How could we be competitive with workers in their country getting paid $3 an hour and no benefits, with few workplace protections or environmental regulations?

 

Consumption levels. Just rearrange the national income identity!

 

BINGO! You can't! These are facts of life we must accept. Placing tariffs is not the answer to this disparity in cost of living...

 

We are spending monkeys! And we spend as much as our credit limits allow. I don't think it makes any difference the income identity?

 

Why do we have to just accept them?
These Free Trade Deals are relatively recent phenomena in the country's history, going back to about the mid-1990s.

 

The economic illiterate will use trade deficits to promote mercantilist irrationality, with trade protectionism guaranteeing the destruction of economic wellbeing. The identity proves the severity of that folly. A trade imbalance reflects savings/consumption by definition. Protectionism is then akin to someone with a headache cutting off their legs to offer an alternative pain to think about...

 

I believe that's a non sequitur (Latin for "it does not follow").

You may not realize it, but I believe that's an argument based on semantics, depending on exactly what those terms are meant to imply.
I've already explained to you in this thread the inherent problem with savings imbalance.
It won't just automatically inevitably correct itself.

Reiver, you're making wild and unsubstantiated leaps of logic, without considering how other factors come into play.

It's like some basic theory from a simpleton, and that's all you're able to comprehend.

 

Zero economic comment, again! Of course you've started with far right politics and simply introduced mercantilist nonsense. Trade is not a zero sum game.

 

The FACT you must accept is that the cost of living/doing business is different all over the world. And just because one nation can provide labor at half the price of the US does not mean there is any conspiracy. Either a US company can compete with other nations or they cannot. Forcing tariffs solely for political reasons will never be the answer...

 

I beg to differ with you. What about for economic reasons?

I just talked about unfair competition, and this would include one nation having a much higher standard of living than another nation.

For the life of me I'm unable to understand why anyone who would support the idea of a higher minimum wage would have trouble with the idea of protective tariffs with other countries that have much lower wages.

 

It has some level of zero sum aspect.

And it's not only just about increasing efficiency, it's also about the redistribution of gains in the economic system.
We've seen that while free trade may reduce the level inequality between countries, it has increased the level of inequality within countries. There are instances were this can hurt the poor in other poorer countries.

Look, Reiver, what if free trade increased the amount of wealth creation by 1% but increased the level of inequality within countries by 3% ?
Would you still be okay with that?

I find it extremely paradoxical that a Socialist, like yourself, would oppose the notion of protectionism. You know that redistribution of wealth (which you presumably support) reduces the overall size of the pie, but you have no problem with that.

I can only logically presume therefore that you must think Free Trade brings more wealth creation than higher taxes would destroy.
You might want to reanalyze that.

 

You don't need to beg here...just type.

Depends on the economic reason? If another nation is subsidizing a certain product in order to gain unfair advantage over US producers then some action is needed. When Trump does it, yet claims it's for economic reasons, it's really just political.

Just because each nation has different cost of livings/doing business does not mean they are unfair?? You do realize the cost of doing business in San Francisco is much greater than in Modesto, Denver compared to Fargo, etc. etc. so what you are whining about happens right here in the USA. Business will decide what they need for it to be viable. Minimum wage rate is a stand-alone issue separate from tariffs...business must pay whatever wages are necessary in order to hire and sustain workers to satisfy demand...

 

China has certainly been doing that, in multiple ways.
Subsidizing industries with discounted electric power rates (from cheap dirty coal fired power plants, by the way, that wouldn't be allowed in the U.S.), currency manipulation, heavily subsidizing their postal system to make it almost free for their companies to ship to foreign countries, intentionally being lax on enforcement of pollution regulations (not that China has very stringent pollution regulations in the first place), that definitely helps factories reduce compliance costs.
Did I mention patent infringement is rarely enforced in the country?
Or you can do an internet search for "formaldehyde in floorboards". They created indoor air quality health hazards for American consumers by cutting corners, using a cheaper adhesive. Were any of the manufacturers ever held to account?
China will do anything to increase their exports, making sure their companies can keep their prices lower than competitors in other countries.

And if exports don't matter, you have to ask yourself why the Chinese government does that.

 

It's fundamentally a very similar type of issue, with much of the same underlying logical justifications, if you step back and look at it.

Isn't minimum wage a form of protectionism?

 

Over 30% of power in the US is generated with coal. Opening coal plants was Trumps big goal so obviously it is allowed in the US.

The US manipulates it's currency.

Your postal rate issue is a United Nations program put in place for developing nations benefitting many nations.

Regarding pollution..https://www.nytimes.com/2018/03/12/upshot/china-pollution-environment-longer-lives.html

You should get your facts straight before you take such a biased hard line...

 

Please explain what minimum wage has to do with tariffs?

 

Suppose you want to increase the minimum wage, but there's a tradeoff between raising the minimum wage and employment.

Well why in the world would you want to ship off jobs to lower wage countries then?

Free trade with these other countries is essentially like a loophole for manufacturing businesses to get out of having to pay minimum wage.

In fact the higher you raise the minimum wage, it would probably just send even more jobs overseas. (All the jobs that can be outsourced, that is)

 

Ensuring your position as ignorant of basic economics...