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Why wouldn't be good for the long term? If we correct our trade deficit with China(it's 5:1 right now) how is that against our interests? China has been playin

Why wouldn't be good for the long term? If we correct our trade deficit with China(it's 5:1 right now) how is that against our interests? China has been playing by their own set of rules from the rest of the world and it's time to end it.

KaoruAoiShiho 8y ago
We actually sell more to China than they do to us. The deficit is an accounting game and basically a lie from the layman's perspective. https://www.bloomberg.com/news/articles/2018-06-12/the-1-4-trillion-u-s-surplus-that-trump-s-not-talking-about https://www.bloomberg.com/news/articles/2018-06-12/the-1-4-t...
Improvotter 8y ago
Oh yes, because the US (not we, I'm European, thank you very much) has a trade deficit with China it's inherently bad for the US? Where are you going to get a good price for steel (and not only steel) when you add a 25% tariff on it when it comes from China? It'll lead to American products also being more expensive and it'll lead to a lower purchasing power in the US. Other countries can also higher their prices for the US because why wouldn't they? The US isn't gonna get it cheaper from China... This leads to an endless price war that is not good for anyone. Edit: also see thinkcontext's comment: https://news.ycombinator.com/item?id=17716933 https://news.ycombinator.com/item?id=17716933
- bluGill 8y ago
  Don't mix short term and long term. Short term we have 25% tariffs. What about long term? Trump has stated some goals that would end the tariffs. If he succeeds that changes things and it is worth the short term trade. Of course who knows if he will succeed. Ask me in 20 years what the real result was.
jaredklewis 8y ago
> If we correct our trade deficit with China(it's 5:1 right now) how is that against our interests? Why is a trade deficit bad? Is there some reason the capital account surplus needs to flow out instead of in? What negative effect do you perceive the trade deficit as having in the economy? Trade deficits are basically neutral. They fund the foreign investment in the US and purchases of US bonds by foreign governments.
- joebubna 8y ago
  There are pros and cons to any complicated issue. The biggest worry over a trade deficit that I'd have are National Security implications due to the dependance on trade with that county. To explain why that would matter, consider the following: - Because of the much lower wages and regulatory costs, manufacturing here in the U.S. seems to have been strangled in the last few decades and mostly moved over to China. - This has caused a shift in the way the U.S. economy works, with cheap parts / goods from China being considered a given and a transition to businesses that depend on those cheap imports. - Once our economy wholly depends on that overseas manufacturing in China, that gives China large leverage over us because we don't have the factories here in the U.S. anymore to pick up the slack if China stopped trading with us and instead found another buyer for their goods. - MUCH more importantly though, is the affect this dependance on a foreign nation would have on us if China decided to do things that we find reprehensible in the world. Think about what Russia did with Crimea. Now imagine China doing something similar. With Russia we were able to slap strong economic sanctions on them... but if our economy is strongly intertwined that makes taking any strong stance against that nation extremely difficult. I don't think anyone wants their future and safety dependent on strangers from a different society that have different cultural values.

KaoruAoiShiho 8y ago

We actually sell more to China than they do to us. The deficit is an accounting game and basically a lie from the layman's perspective. https://www.bloomberg.com/news/articles/2018-06-12/the-1-4-trillion-u-s-surplus-that-trump-s-not-talking-about https://www.bloomberg.com/news/articles/2018-06-12/the-1-4-t...

Improvotter 8y ago

Oh yes, because the US (not we, I'm European, thank you very much) has a trade deficit with China it's inherently bad for the US? Where are you going to get a good price for steel (and not only steel) when you add a 25% tariff on it when it comes from China? It'll lead to American products also being more expensive and it'll lead to a lower purchasing power in the US. Other countries can also higher their prices for the US because why wouldn't they? The US isn't gonna get it cheaper from China... This leads to an endless price war that is not good for anyone. Edit: also see thinkcontext's comment: https://news.ycombinator.com/item?id=17716933 https://news.ycombinator.com/item?id=17716933

bluGill 8y ago
Don't mix short term and long term. Short term we have 25% tariffs. What about long term? Trump has stated some goals that would end the tariffs. If he succeeds that changes things and it is worth the short term trade. Of course who knows if he will succeed. Ask me in 20 years what the real result was.

jaredklewis 8y ago

> If we correct our trade deficit with China(it's 5:1 right now) how is that against our interests? Why is a trade deficit bad? Is there some reason the capital account surplus needs to flow out instead of in? What negative effect do you perceive the trade deficit as having in the economy? Trade deficits are basically neutral. They fund the foreign investment in the US and purchases of US bonds by foreign governments.

joebubna 8y ago
There are pros and cons to any complicated issue. The biggest worry over a trade deficit that I'd have are National Security implications due to the dependance on trade with that county. To explain why that would matter, consider the following: - Because of the much lower wages and regulatory costs, manufacturing here in the U.S. seems to have been strangled in the last few decades and mostly moved over to China. - This has caused a shift in the way the U.S. economy works, with cheap parts / goods from China being considered a given and a transition to businesses that depend on those cheap imports. - Once our economy wholly depends on that overseas manufacturing in China, that gives China large leverage over us because we don't have the factories here in the U.S. anymore to pick up the slack if China stopped trading with us and instead found another buyer for their goods. - MUCH more importantly though, is the affect this dependance on a foreign nation would have on us if China decided to do things that we find reprehensible in the world. Think about what Russia did with Crimea. Now imagine China doing something similar. With Russia we were able to slap strong economic sanctions on them... but if our economy is strongly intertwined that makes taking any strong stance against that nation extremely difficult. I don't think anyone wants their future and safety dependent on strangers from a different society that have different cultural values.