Construction laborers work on the site of a new residential building in New York

Учебник внешней торговли для Трампа

Apr 18, 2018 Asad Jamal

САН-ХОСЕ (КАЛИФОРНИЯ) – Как заявил президент США Дональд Трамп, дефицит США в торговле с Китаем в размере $500 млрд означает, что США «теряют» $500 млрд. Очевидно, он полагает, что профицит и дефицит во внешней торговле равнозначен показателям прибылей и убытков страны. Он жестоко ошибается.

Предположим, что строительный девелопер возводит жилой дом в Нью-Йорке. Он покупает строительные материалы в Китае на $50 млн и тратит ещё $50 млн на услуги местных поставщиков. Если затем этот девелопер продаст построенный дом американским покупателям за $110 млн, он получит прибыль $10 млн.

У этого проекта, совершенно очевидно, отличный смысл, как деловой, так и экономический. А потраченные на китайский импорт $50 млн, естественно, никак нельзя считать «убытком». Но именно такой вывод следует из логики Трампа. Хуже того, Трамп готов потребовать, чтобы «для выравнивания положения» Китай закупил американских товаров на $50 млн. В противном случае, эту страну ждут пошлины, которые могут привести к удорожанию закупок строительных материалов у Китая американскими девелоперами.

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0 Comments on this paragraph, 17 in all 17 Comments on this article

眼光 Canadian / China Aug 31, 2018

Canada does not need any thing USA to have better trade, best thing would be to kick out all USA business from Canada. To many guns and illegal people have come into Canada. The Gun is a big problem now in Canada thanks to the slack border crossing .
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Kerry Pechter Jun 8, 2018

My hero Bob Kuttner brings a bigger frame to this argument than is appropriate: If we get into morality, we'll be here all night. But anybody (Trump and some of the responders to this article) who pretends to understand US trade without understanding the impact of the dollar's status as the global reserve currency will be out of his/her depth. The author of this article constructively reminded us of the global advantage the US enjoys: No matter how much money we print, our trading partners will keep taking dollars for their high-quality cars, silicon chips, etc. (A telling exception: The OPEC oil embargo of 1973, two years after Nixon repudiated claims to repayment in gold.) Trump's failure to show an awareness of the nuances of the situation--by articulating them, say--is the scary part. "Attitude" thrills the base but it's not enough.
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Alex Aslanidis Apr 24, 2018

"This does not hurt the US."

Wrong.

To begin with, it has distorted the US economy against manufacturing and in favor of sectors that has a large bias towards formation of bubbles (the dreaded FIRE sector, i.e. finance, insurance and real-estate).

Secondly, deficits are by definition financed by debt. Just because the currency used to finance this debt is $, it doesn't mean it's not debt. Who buys imports? Not the US government, consumers and private companies do, and their limits of accumulating new debts aren't infinite, which is why the US current-account has declined considerably when compared to what it was in the pre-crisis years.
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Ben Leet Apr 22, 2018

Robert Kuttner at the American Prospect has a good answer to this article: http://prospect.org/article/failure-globalist-fantasy -- Quite obviously globalism is a race to the bottom and everyone gets hurt. Trade with China is wrong, morally. No vote, no freedom of association or speech, no unions, no corruption-free court system, no judicial appeals. It makes no sense to sell the products of slave labor or semi-slave labor, and then paste a blue ribbon of "free trade" on it. Kuttner says: "But with hyper-globalism came hyper-inequality and hyper-insecurity for ordinary people. Establishment politicians offered few answers except to blame the people themselves for having insufficient skills.
People not only lost jobs; they lost respect. Those left behind were branded losers—except that losers voted. Into this vacuum marched Donald Trump, and ultra-nationalist figures like him all over Europe." Globalism will not survive popular dissent. I write a blog, Economics Without Greed, http://benL8.blogspot.com
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Joel Herman Apr 22, 2018

"The developer most likely chose not to purchase the materials from US suppliers because the cost would have been higher, resulting in lower profits"

Which in turn forces other employers to do the same. American wages stagnate as Americans are put in competition with the lowest wage workers in the world . Leading to secular stagnation where demand is weak and can only be stimulated in asset or debt bubbles. Debt that the Chinese are willing to provide as they hold trillions of dollars in American debt . Effectively propping up the value of the dollar and keeping Chinese goods cheaper in American markets and American goods more expensive around the world. .

Try a little harder next time . If the developer and others who win in this situation were willing to share their winning in a more equitable manner, then it would not matter. You can make the argument that American workers benefit from lower prices. Even Samuelson questioned whether the losses were greater than the gains.
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Elizabeth Pula Apr 21, 2018

Well, lets see how the oil prices go with Saudi Arabia owning- US on-land access to refined oil products, and management of all US ports.
http://www.nola.com/business/index.ssf/2017/05/saudi_arabia_now_owns_the_larg.html
https://en.wikipedia.org/wiki/Dubai_Ports_World_controversy

Saudis don't have to be employed at the largest US refinery, nor at all the US ports that are also owned by the Saudi's. They just can call the price out-of-the-blue, and worldwide the consumers, especially in the US have to purchase at the Saudi controlled price constraints. That's regardless of the hot air that gets spouted out of somebody's just as foul mouth. Forget that IPO at the whim of the Saudi's. That's gonna be the biggest con game/ponzi scheme that the western alliance has never seen, courtesy of the up and coming new Iran, Russian, Chinese alliance, and yeah, the Saudi's are in it too. Guess who's the new global court jester?
- Elizabeth Pula Apr 22, 2018
  
  YKW should love this link. I just have to post this to give a bit more color and perspective on the impending oil pricing saga. http://blog.cleveland.com/pdopinion/2008/12/obama_scrapped_a_tax_that_coul.html
  Also, as a cautionary word, note the source/s. I think the original author is quite right-on, BUT, the sources are probably considered by certain left leaning liberalists as biased right distorted nonsense. Unfortunately, all that twisting of opinion really is making it impossible to accept some reasonable reporting from any author, that has a reasonable bit of information to share today, or yesterday. Sometimes, yesterday's words can be quite revealing, especially in 2018. So, is history just repeating itself here. Does it really matter? Is there any significance with the cyclical price changes, or "maneuverings" of the "mass targeted markets"?
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- Elizabeth Pula Apr 21, 2018
  
  Ok, Ok, Saudi Arabia DPW supposedly sold British P&O US assets to US -AIG. BUT, I suggest that someone needs to review all those secondary and tertiary subsequent sub-contracts for all port activities, that probably circumvent every US law, and re-establishes contracts between AIG with Saudi sub-contractors etc. etc. And of course, if anything negative were to happen in the real world due to any negative activities affecting any US products, ships, or employees, any attempts for financial attempts to "be made whole" within the US court system, will be tied up in negotiations ad infinitum, due to no legislative alternatives, due to interim legislation since 9/11 that makes it impossible for any legal recourse for a US citizen for just about anything against any kind of a business that resembles any kind or corporate entity, especially a non-US incorporated entity, and especially any Saudi business entity or individual, citizen, non-citizen or migrant-legal or illegal. Whew, I hope I got all the commas in the right places...
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Jen Graber Apr 19, 2018

I beg to differ with the prior comments. Trump ran on the platform of a corporate financial approach to running the economy and is vastly unaware of the repercussions his trade policies hold on the larger ecosystem of the market. Regardless of Trump attending Wharton, he has leveraged economic fear mongering to maintain his platform with his voters, and this article is rightly directed to an infantile president. It is not about denying the interests of the “sold-out, open-minded American worker,” but challenging the blanket actions and statements the president makes for that very audience. Frankly, what Vivek mentioned about goods mattering less and less is absolutely in opposition to the fact that consumer based marketing is the most omnipresent it has ever been and majority of new technology is directed towards consumption. The article highlights the basic premise that Trump is using broad stroke actions to try to satiate an overall undereducated populace. I am relieved someone is thinking the same thing!
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vivek iyer Apr 18, 2018

This is sophomore stuff. Trump went to Wharton. Nothing mentioned here is relevant.

The fact is, America gains from an optimal tariff. Furthermore, there is good reason to believe that this won't entail rent-seeking or longer term dynamic inefficiency. Goods matter less and less. What does is Tiebout sorting of a particular sort- one where the character of a neighbourhood or locality doesn't change to much because of network effects or external economies.

As another comment makes clear- this article does a dis-service to its author. He is either a fool or thinks he is writing for fools. Either way, it is himself, not Trump, he has made to appear infantile.
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nigel southway Apr 18, 2018

This guy is a good example of how we got into the mess we are in with globalization... Its the rank arrogance that is hard to cope with.... what is worse he is probably managing other peoples money.
- Josh Hollis Apr 19, 2018
  
  Yep. Odd he totally ignores the effect the trade deficit has on employment. That is not to argue tariffs are the way to go, but to ignore the issue seems strange, especially given the hyper certainty with which this polemic was written.
  - nigel southway Apr 19, 2018
    
    Like I said... Its not so much that he wants an economically connected planet at whatever the cost... Its that he is on another planet!
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george jonisch Apr 18, 2018

Hi Rick. Let me try to articulate just some of the many reasons that I fully agree with you. First, the idea that if not for trump’s tariffs we would have “free trade with China” is just wrong. Not only are there many disparities in actual free market policies and behaviors but the individual orientation of the west vs the communal orientation of the east makes a meaningful conversation about how to conduct trade, often difficult. This is not evil or selfishness; it is cultural. When trump says “two way street” he means something very different than the communist party chairman in China. Second: the angle from which this conversation is viewed is very important. With whose welfare should US policies bye concerned? The world’s welfare or that of the American worker who has been sold out by “open minded” administrations for at least 30 years? Terms of trade have as many nuances as any other cultural (and sub-cultural) dimensions. The author seems to have at least one eye closed.
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