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The most recent tweets by Trump regarding this: "The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they wi

by Leary 7y ago

The most recent tweets by Trump regarding this: "The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come... Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers...great for U.S., not good for China!"

ajmurmann 7y ago
There are very real problems with how China treats foreign companies (intellectual theft, requirements to partner with Chinese companies and many more). I'm happy they get addressed. However, Trump completely misrepresents the problem and the impact of tariffs. The negotiations clearly are tackling the right issues, yet here he is talking about trade deficits as some kind of theft and tariffs as a straight up win like some moron who doesn't get econ 101. He is doing his (for once) good effort such a disservice. Is he trying to divide the country by even representing his good work in a way that will only appeal to his hardcore supporters or does he truly not get it? Is there a more charitable explanation? Edit: I also have very sour memories of Obama complaining about the trade deficit with Germany. In that case none of the real issues like we have doing business with China existed. In essence Obama was complaining about German companies being too successful and Germans saving too much money. Maybe I'm particular sensitive to trade deficit rhetoric because of that. If the passing field is level, then maybe the deficit is the fault of the country that has the deficit. In this case the playing field is very skewed and that's the problem.
- dilyevsky 7y ago
  “Trade deficit” is what his voter base “understands” and it sounds scary so it would make sense to peddle this to them even though it has nothing to do with real issues. But then again it’s trump so who the fuck knows why he does it...
  - mistermann 7y ago
    > “Trade deficit” is what his voter base “understands” and it sounds scary so it would make sense to peddle this to them even though it has nothing to do with real issues. I assume you implicitly are saying that they also don't understand the harm a trade war also does to the American economy? Regardless....out of curiosity, how did you come to know the details of what Trump's base thinks at such a detailed level? edit: Also out of curiosity, why would someone downvote this? Does it not seem like a perfectly fair question (if you set your politics aside and think about it logically, something that used to be the overwhelming norm on HN)?
- mikeash 7y ago
  He doesn’t get it. It’s obvious at this point that he’s just not very intelligent and makes it worse by putting in zero effort to understand.
- padobson 7y ago
  Does his understanding matter? If Mnuchin and Lighthizer are hitting all the right notes in the negotiation, does it matter if Trump understands any of it? Let him bluster and take credit for Mnuchin and Lighthizer's good work.
  - ajmurmann 7y ago
    The problem is that his communication is what's most visible and it's misrepresenting his administration's good work. It would be good for the country to at least be unified on some issues. Yet this gets presented in a way where we again can't even agree on the problem.
- ww520 7y ago
  His style of talking is to use simple terms even to the extent of sounding stupid to let the messages go across clearly. Trade deficits being neutral or slight bad is a niche view by a some economists. Most people view trade deficits as bad, rightly or wrongly. The word deficit, loss, and inbalance all have bad connotation. And the loss is huge, adding to a dramatic effect. He's trying to justify his action to his voters. Why won't he use trade deficit reduction as a goal? Also balanced trade would be better than trade deficit, so it's a worth goal to achieve.
  - ajmurmann 7y ago
    If the market was fair, then it's the US's fault to not make more attractive products and buy tons of stuff from China. It wouldn't be China's fault that they are successful and we are not. It would be like Obama bitching about Germany that I mentioned above. But that's not what's going on here. China is playing unfairly.
    - ww520 7y ago
      The market in regarding to China is not fair, so all is moot. Germany isn't play so fair as well [1]. [1] https://www.export.gov/article?id=Germany-Trade-Barriers https://www.export.gov/article?id=Germany-Trade-Barriers
      - ajmurmann 7y ago
        If the trade with China is discriminatory, he should call that out and not whine about a trade deficit, which can have many reasons (like US products might be bad or US consumers consume too much) The link you provide only mentions high testing standards and even specifically calls out that they don't get applied in a discriminatory way. Can you elaborate more?
logfromblammo 7y ago
The import tariffs are paid by the people inside the importing nation. A US import tax on Chinese goods is a tax on American consumers and manufacturers. The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual property. Imports are paid for by exports. If you're worried about a trade imbalance, you could always say that the other nation can keep sending more goods if they want, but we'll only pay for them with trade goods and services, not with cash, or ownership of land and capital.
- logfromblammo 7y ago
  Another way to wipe out a history of past trade imbalances would be to announce the retirement of the domestic currency, citing counterfeiting or hacking, hyperinflation, or whatever else that may sound plausible. You then allow only your own nationals to exchange old money for new money. In order to avoid losing all of the value of their old money, foreign holders would have to buy something from a domestic person, who could then exchange the currency. A smart exchanger would then either keep the new cash, or buy back their sold things at a lower price. In effect, it ends up being a one-time tax on domestic currency being held abroad. Any country that had been building up a reserve of your currency via trade deficits either has to settle up immediately by importing a giant bolus of your trade goods, or it gets screwed.
  - dpark 7y ago
    That sounds like a great way to lose reserve currency status immediately.
    - logfromblammo 7y ago
      If your currency is a reserve currency, this measure is unnecessary--you can just print more of it.
      - 7y ago

by Leary 7y ago

ajmurmann 7y ago

There are very real problems with how China treats foreign companies (intellectual theft, requirements to partner with Chinese companies and many more). I'm happy they get addressed. However, Trump completely misrepresents the problem and the impact of tariffs. The negotiations clearly are tackling the right issues, yet here he is talking about trade deficits as some kind of theft and tariffs as a straight up win like some moron who doesn't get econ 101. He is doing his (for once) good effort such a disservice. Is he trying to divide the country by even representing his good work in a way that will only appeal to his hardcore supporters or does he truly not get it? Is there a more charitable explanation? Edit: I also have very sour memories of Obama complaining about the trade deficit with Germany. In that case none of the real issues like we have doing business with China existed. In essence Obama was complaining about German companies being too successful and Germans saving too much money. Maybe I'm particular sensitive to trade deficit rhetoric because of that. If the passing field is level, then maybe the deficit is the fault of the country that has the deficit. In this case the playing field is very skewed and that's the problem.

dilyevsky 7y ago
“Trade deficit” is what his voter base “understands” and it sounds scary so it would make sense to peddle this to them even though it has nothing to do with real issues. But then again it’s trump so who the fuck knows why he does it...
- mistermann 7y ago
  > “Trade deficit” is what his voter base “understands” and it sounds scary so it would make sense to peddle this to them even though it has nothing to do with real issues. I assume you implicitly are saying that they also don't understand the harm a trade war also does to the American economy? Regardless....out of curiosity, how did you come to know the details of what Trump's base thinks at such a detailed level? edit: Also out of curiosity, why would someone downvote this? Does it not seem like a perfectly fair question (if you set your politics aside and think about it logically, something that used to be the overwhelming norm on HN)?
mikeash 7y ago
He doesn’t get it. It’s obvious at this point that he’s just not very intelligent and makes it worse by putting in zero effort to understand.
padobson 7y ago
Does his understanding matter? If Mnuchin and Lighthizer are hitting all the right notes in the negotiation, does it matter if Trump understands any of it? Let him bluster and take credit for Mnuchin and Lighthizer's good work.
- ajmurmann 7y ago
  The problem is that his communication is what's most visible and it's misrepresenting his administration's good work. It would be good for the country to at least be unified on some issues. Yet this gets presented in a way where we again can't even agree on the problem.
ww520 7y ago
His style of talking is to use simple terms even to the extent of sounding stupid to let the messages go across clearly. Trade deficits being neutral or slight bad is a niche view by a some economists. Most people view trade deficits as bad, rightly or wrongly. The word deficit, loss, and inbalance all have bad connotation. And the loss is huge, adding to a dramatic effect. He's trying to justify his action to his voters. Why won't he use trade deficit reduction as a goal? Also balanced trade would be better than trade deficit, so it's a worth goal to achieve.
- ajmurmann 7y ago
  If the market was fair, then it's the US's fault to not make more attractive products and buy tons of stuff from China. It wouldn't be China's fault that they are successful and we are not. It would be like Obama bitching about Germany that I mentioned above. But that's not what's going on here. China is playing unfairly.
  - ww520 7y ago
    The market in regarding to China is not fair, so all is moot. Germany isn't play so fair as well [1]. [1] https://www.export.gov/article?id=Germany-Trade-Barriers https://www.export.gov/article?id=Germany-Trade-Barriers
    - ajmurmann 7y ago
      If the trade with China is discriminatory, he should call that out and not whine about a trade deficit, which can have many reasons (like US products might be bad or US consumers consume too much) The link you provide only mentions high testing standards and even specifically calls out that they don't get applied in a discriminatory way. Can you elaborate more?

logfromblammo 7y ago

The import tariffs are paid by the people inside the importing nation. A US import tax on Chinese goods is a tax on American consumers and manufacturers. The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual property. Imports are paid for by exports. If you're worried about a trade imbalance, you could always say that the other nation can keep sending more goods if they want, but we'll only pay for them with trade goods and services, not with cash, or ownership of land and capital.

logfromblammo 7y ago
Another way to wipe out a history of past trade imbalances would be to announce the retirement of the domestic currency, citing counterfeiting or hacking, hyperinflation, or whatever else that may sound plausible. You then allow only your own nationals to exchange old money for new money. In order to avoid losing all of the value of their old money, foreign holders would have to buy something from a domestic person, who could then exchange the currency. A smart exchanger would then either keep the new cash, or buy back their sold things at a lower price. In effect, it ends up being a one-time tax on domestic currency being held abroad. Any country that had been building up a reserve of your currency via trade deficits either has to settle up immediately by importing a giant bolus of your trade goods, or it gets screwed.
- dpark 7y ago
  That sounds like a great way to lose reserve currency status immediately.
  - logfromblammo 7y ago
    If your currency is a reserve currency, this measure is unnecessary--you can just print more of it.
    - 7y ago