Analysis: Trump’s explanation of the trade fight with China is wrong in a remarkable number of ways
By Philip Bump Philip Bump National correspondent focused largely on the numbers behind politics Email Bio Follow May 10 at 10:05 AM Trade balances aren’t really very complicated. If the United States buys $1,000 worth of goods from Canada and Canada buys $400 from the United States, the United States has a trade deficit with Canada of $600. Whether that’s necessarily bad depends on a number of other factors: what’s being traded, the state of the economy, the effects on either country’s economy.
Since that peak, imports have receded, as they often do at this part in the cycle. But the drop-off in recent months has been larger than in recent years: Between October and March, imports fell by $21 billion, the biggest drop over that same period on record. Again, though, this formulation doesn’t make sense, by itself. Why is importing inexpensive consumer goods from China necessarily “Crazy”? Trump’s political rhetoric is focused on revitalizing manufacturing, which has led him to disparage manufacturing done in foreign countries. But to broadly disparage all imports as “crazy” is hard to rationalize.
No, they don’t. As we’ve noted before, there are some customs duties that are paid directly to the government when products are imported. In 2017, the government earned about $35 billion that way. But tariffs on imports are often added to the price of the imported product, meaning that the tariffs are being paid by the people who buy the product — in this case, American consumers.
Here his numbers are about right: $250 billion of imports for which tariffs apply, plus $325 billion for which they don’t now is about $575 billion — a bit more than the $540 billion imported in 2018 but not terribly so.“With the over 100 Billion Dollars in Tariffs that we take in”, he wrote, “we will buy agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance. ...
What Trump’s claiming here, though, is that he’ll take money paid by China in the form of tariffs to buy the farmers’ goods and ship them to other countries — leaving lots of money left over for other funding needs. But we can translate his argument in a less flattering way: Trump is taxing American consumers and using some of that money to buy agricultural products to protect part of his political base from his trade war.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
Melinda Gates: Capitalism needs work, but it beats socialism and the US is 'lucky' to have itMelinda Gates, in an interview with CNBC's Becky Quick, says people living in developing countries 'want to live in these types of capitalistic societies.'
Consulte Mais informação »
Should we be concerned about Netflix monetizing our user data?Netflix continues to invest billions of dollars building its library of content, with analysts predicting the company will spend $15 billion on content in 2019. But their business model warrants a closer look, says Jason Mittell. Mittell, a film professor at Middlebury College, joined THINK to discuss why we shouldn’t trust Netflix with our data just yet.
Consulte Mais informação »
Trump's trade fight with China sends Dow plunging 350 pointsStocks slid on Monday in early trading after President Donald Trump threatened over Twitter to hike tariffs on Chinese imports.
Consulte Mais informação »
Trump’s tougher stance on China tested amid escalating trade fight, stalled North Korea talksThe president hopes to maintain Beijing’s cooperation on sanctions against Pyongyang even as he threatens new tariffs on Chinese goods.
Consulte Mais informação »
Fed's Kaplan optimistic U.S., China will find ways to tackle trade issuesDallas Federal Reserve Bank President Robert Kaplan said on Tuesday he was optim...
Consulte Mais informação »
Dow, stocks pare losses in afternoon trading after Trump's trade threat to ChinaPresident Donald Trump's threats on Sunday to hike tariffs on Chinese imports initially worried investors that trade tensions between the two countries were escalating.
Consulte Mais informação »
Ways and Means chairman suggests court is next step in Trump tax returns fightRichard Neal’s comments come after the administration rebuffed multiple requests for Trump’s tax returns.
Consulte Mais informação »
Analysis | The Finance 202: U.S.-China trade deal hits speed bumpsChinese Vice Premier Liu He is still coming to Washington.
Consulte Mais informação »