• Entertainment
  • Finance
  • Marketing
  • Real Estate
  • Technology
  • Social
National Journal Community Of e-Experts
Finance 0

Tariff Tough Talk

By Kurt Osterberg · On April 11, 2018

International trade policy shouldn’t be headline news. We just need stability, so everyone can conduct business—but that’s not where we are.

Trade and tariffs are all over the news because President Trump is going after China. This vexes financial markets, which want minimal trade barriers.

Regular readers know I’m not a Trump fan… but on this, he’s partly right. China hasn’t reciprocated US trade policies, and some changes are necessary.

However, which policies the president attacks and how he tries to change them is important. Flawed methods usually produce flawed results.

In this case, the problem is more than a flawed method. It’s flawed economics.

Photo: Getty Images

Little Pieces of Deficit

The president’s tweets and public statements tell us he doesn’t like trade deficits, particularly the one with China. He seems to view it as a win-or-lose proposition.

That’s not exactly right.

For one, a trade deficit between two nations isn’t unusual. Precise balance would be strange. Countries have different needs, so some import more than others. Furthermore, it’s not like the side with the deficit loses anything.

In this case, China gets our dollars and we get Chinese-made goods. Your house is probably stuffed with little pieces of the US-China trade deficit.

Is that bad? As an economic matter, it’s just reality.

  • Americans want Chinese goods more than we want the dollars spent on them.
  • Chinese want those dollars more than they want the goods.
  • It’s not about winning or losing. Everybody gets what they want.

    Photo: Getty Images

    Not Winning

    There is a wrinkle to this, though. I said, “The Chinese want those dollars,” but they’d prefer to use their own currency. Eventually they will, too, but for now we still settle our trade in dollars.

    Just as our homes hold Chinese goods, Chinese bank accounts hold trillions of greenbacks. That’s the other side of the trade deficit President Trump hates so much. It’s the same money.

    Print Friendly, PDF & Email

    Share Tweet

    Kurt Osterberg

    You Might Also Like

    • Finance

      STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

    • Finance

      NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

    • Finance

      5 NFTs Trending on Twitter Going Cheap to Invest in Now

    No Comments

    Leave a reply Cancel reply

    Top Finance

    • 3 Best Large-Cap Blend Mutual Funds For Enticing Returns 3 Best Large-Cap Blend Mutual Funds For Enticing Returns
    • What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage
    • Hedge Funds In The US Hedge Funds In The US
    • 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement
    • Chart: Amazon’s Dominance In Ecommerce Chart: Amazon’s Dominance In Ecommerce

    New Posts

    • STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

      STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

      June 20, 2022
    • NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

      NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

      June 20, 2022
    • 5 NFTs Trending on Twitter Going Cheap to Invest in Now

      5 NFTs Trending on Twitter Going Cheap to Invest in Now

      June 20, 2022
    • Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

      Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

      June 20, 2022
    • Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

      Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

      June 20, 2022
    • About
    • Contact Us
    • Privacy & Policy
    • Sitemap
    • Terms of use

    Copyright © 2018-2021 NJCEE. All Rights Reserved.