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From what I can see, Madagascar in 2024 had a trade deficit with the US of about $700 million and had total imports of about $5.4 billion. It's feasible that th
by bitshiftfaced 1y ago
From what I can see, Madagascar in 2024 had a trade deficit with the US of about $700 million and had total imports of about $5.4 billion. It's feasible that they might prefer to transfer 13%[0] of their current imports to sources from the USA even if it's more expensive since being able to export more cheaply to the USA would be a net gain.
0. Actually less than this since there's a floor of a 10% tariffs. They can have deficit/imports of up to 20% before they incur a penalty.
- ricardobeat 1y agoThat's simply rationalizing the use of tariffs as leverage for trade deals, and only makes it desirable to the US. But that was not the question. A poorer country that exports raw goods does not necessarily have the spending power (or need) to import the same amount of goods - having a trade surplus is desirable for them, and not necessarily bad for the US.
- bitshiftfaced 1y agoOh I see. To you earlier question, I believe neoclassical economics assumed international trade would tend towards balance in the long run due to market forces.