Comment by epolanski
4 days ago
The exports argument is so bloated.
US has thrived economically for 5 decades after becoming an import economy.
This whole export/import balance is such a lame reasoning...yes you've spent a certain amount of $...and got plenty of stuff in exchange. In the words of some economist I've read "by Trump's reasoning my barber is also taking advantage of me because I cut my hair every month and he never buys anything from me".
Last but not least, services are never included in these trade balance arguments. How much money flows to US through their financial and IT services alone...?
The trade balance as a number shouldn't matter, but offshoring critical manufacturing capability and production ecosystems does.
China has at least 2 key advantages in manufacturing -- cheaper labor and laxer regulations. If the US were to embrace and extend robotics and automation more vigorously that first point could become moot. Also the second point as far as labor regulations go, and if environmental regulations were properly priced then that too would be moot.
1. The US industrial output has been growing for decades[1]. US manufacturing is doing very well, it's US manufacturing jobs that aren't due to automation.
2. Manufacturing as % of the population has long been declining globally including China. Labor cost is a very minor expense in modern manufacturing unless we talking something like clothing. I don't think Americans miss the millions of jobs they had 60 years ago sewing shoes.
3. Car industry isn't critical manufacturing capability by any means. I can understand ships, or steel or even chips, but cars?
[1] https://www.macrotrends.net/global-metrics/countries/usa/uni...
That just shows dollar amounts, with no sense of what's being sold.
Being that so many companies have moved production to China to make their products cheaper, I'd be curious as to what then comprises those savings.
2 replies →
The trade deficit argument is mostly nonsense, but it's being made disingenuously anyway so the actual merit doesn't really matter to the people making it. Trump is a big fan of tariffs because they give him negotiating leverage to make deals beneficial to his own interests and those of his cronies. There is no national interest involved, this is an administration devoted purely to grift. Any benefit to the country is purely accidental.