Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Trump’s bad logic on 'bad trade deals'
Yahoo Finance ^ | March 4, 2016 | Rick Newman

Posted on 03/07/2016 9:01:17 AM PST by reaganaut1

Somebody please tell Donald Trump: A trade deficit isn’t a loss. You could even argue it’s a gain.

The Republican presidential frontrunner has been railing against “bad trade deals” since declaring his candidacy last summer. And he’s amplified the criticism, if that’s possible, in recent weeks. “If you look at China, and you look at Japan, and if you look at Mexico … they’re killing us,” he said during the latest Republican debate on Fox News. “With China we’re going to lose $505 billion in terms of trade …. Mexico, $58 billion. Japan, probably about… $109 billion.”

Trump is talking about the annual U.S. trade deficit with those three countries—but the amounts in question are anything but losses. Trade occurs when one party buys something from another, and trade between countries has the same mutual benefit as trade between an individual consumer and a merchant: each side gets something they want. “They’re sending us goods and we’re sending them green pieces of paper,” says Patrick Newport, U.S. economist for forecasting firm IHS Global Insight. “I don’t see how that’s a loss.”

Trump's numbers, incidentally, are off. Here are the U.S. trade deficits with each country in 2015:

China: $366 billion

Japan: $69 billion

Mexico: $58 billion

Those numbers might seem high, but in an $18 trillion economy, they don't really worry economists. What does worry economists is Trump's plan to slap tariffs of 35% to 45% on imports from China and Mexico, a tax that would be passed along almost entirely to consumers. Trump's logic seems to be this: Low-wage countries where workers get paid a fraction of U.S. wages are basically undercutting American workers, and therefore ought to be punished. But his tariffs would punish Americans too, especially lower-income consumers who benefit most from cheap imports.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Editorial; Mexico; US: Alabama; US: New York
KEYWORDS: 2016election; alabama; election2016; h1b; jeffsessions; mexico; newyork; obamatrade; ricknewman; tariffs; tisa; tpa; tpp; trade; trump; wikileaks; yahoofinance
Navigation: use the links below to view more comments.
first 1-2021-4041-6061-80 ... 121-128 next last
I don't want the government dictating where I can buy things from. And slapping tariffs on foreign goods will cause other nations to retaliate, costing us export jobs.
1 posted on 03/07/2016 9:01:17 AM PST by reaganaut1
[ Post Reply | Private Reply | View Replies]

To: reaganaut1

God how the Powers That Be hate Trump.

They see their bought and paid-for access slipping away.


2 posted on 03/07/2016 9:02:20 AM PST by freedumb2003 (Don't mistake my silence for ignorance, my calmness for acceptance, or my kindness for weakness)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1
Well, in that case I guess we need to vote for Milt Romley again.
3 posted on 03/07/2016 9:03:57 AM PST by E. Pluribus Unum ("If voting made any difference they wouldn't let us do it." --Samuel Clemens)
[ Post Reply | Private Reply | To 1 | View Replies]

To: freedumb2003
"They see their bought and paid-for access slipping away."

Or, the author is right and Trump is wrong.

4 posted on 03/07/2016 9:04:58 AM PST by mlo
[ Post Reply | Private Reply | To 2 | View Replies]

To: freedumb2003

God how Trumpsters hate logic and reality!


5 posted on 03/07/2016 9:06:29 AM PST by aquila48
[ Post Reply | Private Reply | To 2 | View Replies]

To: reaganaut1

Have you ever been to China?

Try to find ANYTHING there that is made here at any store on the street. Let me know when you do.

The only real exports we have to China are food and airliners.

Your free trade argument is bogus.


6 posted on 03/07/2016 9:07:20 AM PST by datura (Proud Infidel)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

Another idiot that flunked Econ 101. A trade deficit is bad, it is an outflow of wealth from this country.

I guess none of these people remember when this country was a creditor nation and not a debtor nation.

I am continually astounded by the stupidity of those writing finance.


7 posted on 03/07/2016 9:08:15 AM PST by Captain Peter Blood
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

Lol, who is this clown? When the products being exported to the US are products that were once produced in the US, yes it is a loss of millions of jobs and hundreds of billions of economic activity now taking place in some cheap labor nation, and not in the USA.


8 posted on 03/07/2016 9:08:45 AM PST by Will88
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

They must open their markets to our goods equally, or is not free trade.


9 posted on 03/07/2016 9:09:08 AM PST by aMorePerfectUnion (BREAKING.... Vulgarian Resistance begins attack on the GOPe Death Star.....)
[ Post Reply | Private Reply | To 1 | View Replies]

To: datura
So what? Do they bury the green pieces of paper in the ground? That's a great deal for us!

Seriously, if the Chinese make goods cheaper for Americans, that makes the American buyers of those goods richer. Getting more for your money is the same as having more money. Everyone forgets about that side of the equation when talking about trade. The author is correct, a trade deficit is not a loss.

10 posted on 03/07/2016 9:10:10 AM PST by mlo
[ Post Reply | Private Reply | To 6 | View Replies]

To: reaganaut1
I don't want the government dictating where I can buy things from. And slapping tariffs on foreign goods will cause other nations to retaliate, costing us export jobs.

------

Tariffs are constitutional and the only original constitutional method for revenues. So if you don't like tariffs (which don't ban you from buying) move to China.

Free trade has been a failure and jobs lost are greater than the export jobs gained. There is a company I know of personally that made a fortune stripping American factories completely and exporting them to China so they can be re-assembled there. I don't mind seeing those export jobs dry up. Our other main export to China is our timber and scrap metal.

11 posted on 03/07/2016 9:11:08 AM PST by Trumpinator ("Are you Batman?" the boy asked. "I am Batman," Trump said.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

You should go read “Wealth of Nations” by Adam Smith , obviously they didn’t teach much when you were in school.

As a side note, pardon me for screaming,
THE WORLD NEEDS THE USA, WE DON’T NEED THEM!!


12 posted on 03/07/2016 9:11:24 AM PST by eyeamok
[ Post Reply | Private Reply | To 1 | View Replies]

To: Captain Peter Blood
Another idiot that flunked Econ 101. A trade deficit is bad, it is an outflow of wealth from this country.

Back in the '60s and '70s, news of increased trade deficits would cause the stock market to fall. Now, they pretend skyrocketing trade deficits are no problem, and sometimes that's correct for the former US producer that moved production to a cheap labor nation and now exports back to the US.

13 posted on 03/07/2016 9:11:51 AM PST by Will88
[ Post Reply | Private Reply | To 7 | View Replies]

To: datura
The only real exports we have to China are food and airliners.

And China is working hard to end any need to import commercial airliners from the US, with the assistance Boeing, unfortunately.

14 posted on 03/07/2016 9:13:32 AM PST by Will88
[ Post Reply | Private Reply | To 6 | View Replies]

To: reaganaut1
Trump is talking about the annual U.S. trade deficit with those three countries—but the amounts in question are anything but losses.

So now, a deficit is not a loss, but a gain?

With trade, you either have a surplus or a deficit, but now, this financial genius would have us believe that black is white, up is down and we are too stupid to know the difference.

15 posted on 03/07/2016 9:14:07 AM PST by USS Alaska (Exterminate the terrorist savages, everywhere.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

Higher prices, higher cost of doing business, wages have less value, lower standard of living.

https://www.youtube.com/watch?v=7DhagKyvDck

thanks for your post..


16 posted on 03/07/2016 9:15:49 AM PST by D-fendr (Deus non alligatur sacramentis sed nos alligamur.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Captain Peter Blood

If a trade deficit is bad, explain Hong Kong or at least Hong Kong before it was returned to China.


17 posted on 03/07/2016 9:16:07 AM PST by rey
[ Post Reply | Private Reply | To 7 | View Replies]

To: reaganaut1

He’s right - underwear at Walmart does indeed cost less. But, if you stop the accounting there you’re willfully ignorant. The costs associated with all the dislocations fall to the taxpayers and homeowners. All the gain goes to the smaller group of investors. Silly libertarian free trade is a net loser - the facts are in. We’ve deindustrialized america. And there’s hell to pay. Couple that with open borders, a debt fueled welfare state and nation building and your looking at the end of the greatest country ever.


18 posted on 03/07/2016 9:16:22 AM PST by major-pelham
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

“Trump’s logic seems to be this: Low-wage countries where workers get paid a fraction of U.S. wages are basically undercutting American workers, and therefore ought to be punished.”

This guy is an idiot. Both in economics and on facts: what Trump has stated:

“China is manipulating their currency”

Everyone past 5th grade knows this is the problem, even Romney.


19 posted on 03/07/2016 9:17:47 AM PST by JPJones
[ Post Reply | Private Reply | To 1 | View Replies]

To: Captain Peter Blood

>>>A trade deficit is bad

In my house we love being able to buy stuff cheaper. We’re able to do more with our money, and able to make our business more profitable.

>>>it is an outflow of wealth from this country.

Outflow of dollars that has to be spent... in this country. We get lots of stuff, they get dollars, the dollars come back.


20 posted on 03/07/2016 9:18:12 AM PST by D-fendr (Deus non alligatur sacramentis sed nos alligamur.)
[ Post Reply | Private Reply | To 7 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-6061-80 ... 121-128 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson