alt Hacker NewsThe context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
https://finance.yahoo.com/economy/policy/articles/trump-brag...
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Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?
It also excludes money spent on services, which in most cases favours the US.
Economically, it's a problem long-term. Dollars only have value if you can buy things with them. Japan, China, Saudi Arabia - countries we've had trade deficits with - have been buying our business, infrastructure, and real estate.
Not defending tariffs, but there's a reason people care about trade deficits.
Also, Trumps argument always ignores the bulk of US economy and exports: services.
Somehow we count shoes and timber but not gazzilions in financial and cloud services.
He doesn't have a view on trade deficits. To imply he does is giving him far too much credit. The "most powerful person on earth" in charge of the United States fundamentally doesn't understand trade deficits or tariffs.
We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.