Posted on 04/11/2025 5:05:19 AM PDT by karpov
President Trump is wielding tariffs to try to close the massive U.S. trade deficit in goods, which he sees as a sign of economic weakness.
It is only part of the trade story.
While the U.S. buys more goods from abroad than it sells, the opposite is true for services, which include everything from streaming subscriptions to financial advice. Trump left these service exports out of his tariff math, but they are being pulled into his trade wars.
On Wednesday, Trump ratcheted up the U.S. trade war with China, but put broader tariffs above 10% on most other countries on ice for 90 days. Sectoral tariffs such as the ones imposed on automobiles weren’t changed.
Still, the shock of Trump’s globe-spanning tariffs has sent countries scrambling and rocked markets as world leaders adapt to a suddenly much more adversarial trade relationship with the world’s biggest economy.
Countries can’t easily impose tariffs on services, but they can tax, fine or even ban U.S. companies. The European Union has floated going after big U.S. tech companies in response to Trump’s sweeping tariff threats. Trump also put U.S. service exports at risk by irking foreign consumers, many of whom might choose to avoid U.S. banks, asset managers and other firms. An economic slowdown that curbs demand as markets grapple with the president’s extreme trade makeover won’t help either.
For decades, the U.S. and the rest of the world had a deal: Other countries sent cars, phones, clothes and food to the U.S., and in return they got bonds, software and management consultants.
As the U.S. imported more goods from abroad and domestic factories closed, its goods trade deficit swelled to a record $1.21 trillion by 2024. At the same time, the U.S. services trade surplus grew to $295 billion last year
(Excerpt) Read more at wsj.com ...
The US didn’t survive against the Axis and the Warsaw Pact due to “services,” you Wall Street Journal traitors.
Is there an award for hand wringing?
WSJ is the pimp for Wall Street, that doesn’t care about main Street whatsoever. It’s why they were created in the first place.
Wow!
1. $1.2 trillion goods trade deficit
2. $0.3 trillion services trade surplus
At times, it seems the only manufacturing base we have left is defense. That cannot succeed without a solid pool of excellent manufacturing engineers.
There was a joke a few decades ago that, in our expanding “services economy,” we would all be shining each others’ shoes.
If it is not domiciled in the US, it is not a US company.
Likewise, if a company is domiciled in Delaware, it is not an Arkansas company.
Apple is really an Irish company.
Elon found out how that works, and changed his domicile to Texas.
Apparently, you have to follow the legal expectations of where you are incorporated, but can have benefits, too.
Services only work until the country being services learns the skills to service themselves.
It is the same in manufacturing. Many countries learned from our manufacturing moving into their nation, then created their own.
The future is near-sourced, local, self-reliant industry and services.
The objective is to have manufacturing moved back to the U.S. to provide good middle-class jobs. Services don’t do that.
124% tariff on Tiktok.
The service sector doesn’t produce anything!
I’m not saying it’s not a valid business model, but in economic terms, services are not a primary contributor to growth.
I think the administration has been quite clear on the point you bring up though it’s lost on the WSJ.
and in return they got bonds, software and management consultants.
Bonds!!
Mebe that’s why we’re 36T in debt
Sure this isn’t the Bee? I’m sure every nation is in a rush to get their share of Disney-style perversion, JPMorgan-style manipulation and Microsoft-style bloat and spy-ware.
I, for one, have had quite enough of “getting served” by the Federal government.
Sounds like a great deal. /sarcasm off/
Where does military protection come into this equation?
It’s a big number.
The question is whether or not the rest of world can do without what we provide.
Especially in the short term.
Talk is cheap.
Suddenly they’re awash in money.
It is a shame that the WSJ has degraded itself totally to self-interest and not the interest of good Journalism.
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