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Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
Dimwit Trump
()
Date: November 27, 2018 11:31AM
The trade deficit is a function of the dollar, not a function of bad trade practices abroad. But the basic problem the Trump administration faces is, its own tax policy and fiscal policy is driving the dollar up.
Between 2001 and 2017, Chinese trade destroyed 3.4 million American jobs, three-quarters of them in manufacturing, said economist Robert Scott of the union-backed Economic Policy Institute.
“The single most important cause has been currency manipulation and currency misalignment,” said Scott, who said other U.S. trading partners, such as Japan, the European Union and South Korea, also have benefited from artificially low currency values.
Between 2001 and 2017, Chinese trade destroyed 3.4 million American jobs, three-quarters of them in manufacturing, said economist Robert Scott of the union-backed Economic Policy Institute.
“The single most important cause has been currency manipulation and currency misalignment,” said Scott, who said other U.S. trading partners, such as Japan, the European Union and South Korea, also have benefited from artificially low currency values.
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
Gerrymanderer2
()
Date: November 27, 2018 11:40AM
Nothing Trump or Republicans say or do ever matches the numbers.
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
Trump is stupid
()
Date: November 27, 2018 11:44AM
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Why the trade deficit is getting bigger — despite all of Trump’s promises
Cutlery in mid-production at the Liberty Tabletop factory in Sherrill, N.Y., Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
By David J. Lynch
November 27 at 7:48 AM
Greg Owens wants to sell his company’s stainless-steel flatware to customers in Britain and Australia. Only one thing stands in his way: the strength of the U.S. dollar.
Owens’s company, Liberty Tabletop, the last stainless steel flatware maker in the United States, produces its distinctive offerings in a century-old brick building in Sherrill, N.Y. Each time Owens converts the sales price of competing products in those overseas markets into dollars, he flinches.
“When I’m at a 20 or 30 percent disadvantage versus my competitors’ prices, I have no chance — and that’s pretty much what’s happening,” he said. “If that were somehow to be corrected, it would go a long way to helping us be more competitive.”
Owens’s frustration stems from President Trump’s approach to shrinking the U.S. trade deficit. Trump promised during the 2016 campaign that he would act against China for manipulating the yuan’s value, and he repeatedly has called the dollar “too strong.” But he has taken no direct action on currencies, instead relying on tariffs to battle trade barriers that he says hurt American companies.
[China and the U.S. are struggling to find common ground on trade]
Flatware made smooth at the Liberty Tabletop factory in Sherrill, New York. (Heather Ainsworth/For The Washington Post)
Workers at the Liberty Tabletop factory in Sherrill, New York. (Heather Ainsworth/For The Washington Post)
Trump’s “America First” stance has yet to make a dent in the merchandise trade deficit, which hit a monthly record in September. Amid signs that the rising dollar is depressing U.S. exports — and muting hiring growth in a handful of industrial states — some labor and business groups are calling on the president to take action to weaken the U.S. currency. Yet his economic policies are making it stronger.
“The trade deficit is a function of the dollar, not a function of bad trade practices abroad,” said Brad Setser, who was a White House and Treasury Department economist in the Obama administration. “But the basic problem the administration faces is, its own tax policy and fiscal policy is driving the dollar up.”
The dollar has risen more than 7 percent this year against the currencies of major U.S. trading partners, part of a 22 percent gain since the end of 2013, according to the Bank of International Settlements index.
A stronger dollar acts as a price increase for U.S. goods sold abroad while making imported products less expensive for Americans. The greenback’s effect can be glimpsed in Liberty Tabletop’s near-exclusive focus on domestic sales as well as government statistics showing that, excluding oil, U.S. exports of goods in September were lower than they were four years ago.
Currency values have had an especially pronounced effect on U.S.-China trade, which accounts for nearly half of the annual $800 billion U.S. deficit in goods trade. For more than a decade after joining the World Trade Organization in 2001, Beijing intervened in foreign exchange markets to keep the yuan artificially low. That boosted Chinese exports, often at the expense of American manufacturers, and contributed to the hollowing out of Midwestern industrial states that Trump won in 2016, economists say.
Between 2001 and 2017, Chinese trade destroyed 3.4 million American jobs, three-quarters of them in manufacturing, said economist Robert Scott of the union-backed Economic Policy Institute.
“The single most important cause has been currency manipulation and currency misalignment,” said Scott, who said other U.S. trading partners, such as Japan, the European Union and South Korea, also have benefited from artificially low currency values.
Other economists say the trade deficit is linked to broad economic forces, such as a relatively low national savings rate.
China no longer intervenes as routinely in currency markets, doing so only to prevent overly swift or destabilizing moves in the yuan, economists say. As a result, the People’s Bank of China’s dollar reserves are 9.7 percent, or $124.2 billion, lower than they were in January 2014.
Still, since April, the yuan has dropped 9.5 percent against the dollar, eroding the 10 percent and 25 percent tariffs that Trump has imposed on Chinese goods.
As the global reserve currency, the dollar benefits from steady foreign demand no matter how the U.S. economy is performing. That helps keep domestic borrowing costs lower than they otherwise would be, a benefit that economists describe as an “exorbitant privilege,” and supports the dollar’s value.
Several factors explain the dollar’s lofty perch. The Federal Reserve’s interest rate increases — even as the European Central Bank keeps its rates on the floor — are drawing foreign capital to U.S. investments and currency.
[The danger of an open-ended trade war with China]
Alice Roberts works in the shipping department at Liberty Tabletop in Sherrill, N.Y., Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
Greg Owens, Liberty Tabletop owner, at the Sherrill, N.Y., facility, Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
But Trump’s tax and spending policies also are driving the dollar higher, along with widening the trade deficit, according to the International Monetary Fund, which calls the dollar the most overvalued of 14 major currencies.
Last year’s $1.5 trillion Republican cut in corporate and personal income taxes, along with the decision to eliminate congressional limits on government spending, has revved up the economy and created nearly $1 trillion budget deficits for the coming years that require financing from abroad.
“The dollar is overvalued,” said Joseph Gagnon, a former Federal Reserve economist now at the Peterson Institute for International Economics. “We have a bigger trade deficit than can be explained by fundamentals.”
In January, Trump abandoned his earlier worries about a rising greenback and embraced U.S. presidents’ traditional view, telling CNBC: “The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar.”
But he also has criticized the Fed’s interest rate increases, calling for lower rates that would allow the dollar to sink, and he has accused China and the European Union of manipulating their currencies to gain a trading edge.
Instead of tackling currency issues, the president this year has tried to reduce the trade deficit by imposing tariffs on solar panels, washing machines, industrial metals and $250 billion in Chinese imports.
Many economists and business executives doubt that approach. Countries that resort to tariffs typically end up with falling output and productivity, higher unemployment rates and greater inequality while failing to close their trade gaps, according to a new International Monetary Fund study.
The Washington Post
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Business
Why the trade deficit is getting bigger — despite all of Trump’s promises
Cutlery in mid-production at the Liberty Tabletop factory in Sherrill, N.Y., Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
By David J. Lynch
November 27 at 7:48 AM
Greg Owens wants to sell his company’s stainless-steel flatware to customers in Britain and Australia. Only one thing stands in his way: the strength of the U.S. dollar.
Owens’s company, Liberty Tabletop, the last stainless steel flatware maker in the United States, produces its distinctive offerings in a century-old brick building in Sherrill, N.Y. Each time Owens converts the sales price of competing products in those overseas markets into dollars, he flinches.
“When I’m at a 20 or 30 percent disadvantage versus my competitors’ prices, I have no chance — and that’s pretty much what’s happening,” he said. “If that were somehow to be corrected, it would go a long way to helping us be more competitive.”
Owens’s frustration stems from President Trump’s approach to shrinking the U.S. trade deficit. Trump promised during the 2016 campaign that he would act against China for manipulating the yuan’s value, and he repeatedly has called the dollar “too strong.” But he has taken no direct action on currencies, instead relying on tariffs to battle trade barriers that he says hurt American companies.
[China and the U.S. are struggling to find common ground on trade]
Flatware made smooth at the Liberty Tabletop factory in Sherrill, New York. (Heather Ainsworth/For The Washington Post)
Workers at the Liberty Tabletop factory in Sherrill, New York. (Heather Ainsworth/For The Washington Post)
Trump’s “America First” stance has yet to make a dent in the merchandise trade deficit, which hit a monthly record in September. Amid signs that the rising dollar is depressing U.S. exports — and muting hiring growth in a handful of industrial states — some labor and business groups are calling on the president to take action to weaken the U.S. currency. Yet his economic policies are making it stronger.
“The trade deficit is a function of the dollar, not a function of bad trade practices abroad,” said Brad Setser, who was a White House and Treasury Department economist in the Obama administration. “But the basic problem the administration faces is, its own tax policy and fiscal policy is driving the dollar up.”
The dollar has risen more than 7 percent this year against the currencies of major U.S. trading partners, part of a 22 percent gain since the end of 2013, according to the Bank of International Settlements index.
A stronger dollar acts as a price increase for U.S. goods sold abroad while making imported products less expensive for Americans. The greenback’s effect can be glimpsed in Liberty Tabletop’s near-exclusive focus on domestic sales as well as government statistics showing that, excluding oil, U.S. exports of goods in September were lower than they were four years ago.
Currency values have had an especially pronounced effect on U.S.-China trade, which accounts for nearly half of the annual $800 billion U.S. deficit in goods trade. For more than a decade after joining the World Trade Organization in 2001, Beijing intervened in foreign exchange markets to keep the yuan artificially low. That boosted Chinese exports, often at the expense of American manufacturers, and contributed to the hollowing out of Midwestern industrial states that Trump won in 2016, economists say.
Between 2001 and 2017, Chinese trade destroyed 3.4 million American jobs, three-quarters of them in manufacturing, said economist Robert Scott of the union-backed Economic Policy Institute.
“The single most important cause has been currency manipulation and currency misalignment,” said Scott, who said other U.S. trading partners, such as Japan, the European Union and South Korea, also have benefited from artificially low currency values.
Other economists say the trade deficit is linked to broad economic forces, such as a relatively low national savings rate.
China no longer intervenes as routinely in currency markets, doing so only to prevent overly swift or destabilizing moves in the yuan, economists say. As a result, the People’s Bank of China’s dollar reserves are 9.7 percent, or $124.2 billion, lower than they were in January 2014.
Still, since April, the yuan has dropped 9.5 percent against the dollar, eroding the 10 percent and 25 percent tariffs that Trump has imposed on Chinese goods.
As the global reserve currency, the dollar benefits from steady foreign demand no matter how the U.S. economy is performing. That helps keep domestic borrowing costs lower than they otherwise would be, a benefit that economists describe as an “exorbitant privilege,” and supports the dollar’s value.
Several factors explain the dollar’s lofty perch. The Federal Reserve’s interest rate increases — even as the European Central Bank keeps its rates on the floor — are drawing foreign capital to U.S. investments and currency.
[The danger of an open-ended trade war with China]
Alice Roberts works in the shipping department at Liberty Tabletop in Sherrill, N.Y., Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
Greg Owens, Liberty Tabletop owner, at the Sherrill, N.Y., facility, Thursday, November 8, 2018. (Heather Ainsworth/For The Washington Post)
But Trump’s tax and spending policies also are driving the dollar higher, along with widening the trade deficit, according to the International Monetary Fund, which calls the dollar the most overvalued of 14 major currencies.
Last year’s $1.5 trillion Republican cut in corporate and personal income taxes, along with the decision to eliminate congressional limits on government spending, has revved up the economy and created nearly $1 trillion budget deficits for the coming years that require financing from abroad.
“The dollar is overvalued,” said Joseph Gagnon, a former Federal Reserve economist now at the Peterson Institute for International Economics. “We have a bigger trade deficit than can be explained by fundamentals.”
In January, Trump abandoned his earlier worries about a rising greenback and embraced U.S. presidents’ traditional view, telling CNBC: “The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar.”
But he also has criticized the Fed’s interest rate increases, calling for lower rates that would allow the dollar to sink, and he has accused China and the European Union of manipulating their currencies to gain a trading edge.
Instead of tackling currency issues, the president this year has tried to reduce the trade deficit by imposing tariffs on solar panels, washing machines, industrial metals and $250 billion in Chinese imports.
Many economists and business executives doubt that approach. Countries that resort to tariffs typically end up with falling output and productivity, higher unemployment rates and greater inequality while failing to close their trade gaps, according to a new International Monetary Fund study.
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
taj mahal in chief
()
Date: November 27, 2018 11:46AM
If it’s something Trump promises, it’s pretty much a guarantee it either won’t happen or will wind up being the exact opposite of what he said.
Re: Toddlers can't handle losing
Posted by:
Liberals are fun to watch
()
Date: November 27, 2018 11:56AM
.
Attachments:
Attachments:
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
yxyn4
()
Date: November 27, 2018 12:10PM
Bill Clinton democrats have said all along that closing USA factories and selling the factory equipment to (mexico?) was healthy because people profited from it and the dollar demanded it (dollars in DNC democrats purses).
Bill Clinton democrats have said all along that USA companies are rip-offs and buying chinese imports would "punish USA rich for not giving out more free shit"
MEANWHILE - giving away free shit is highly illegal it's called "dumping". The intent is to offer "candy" to prevent sales of a USA company and kill it / close it down (the companies who's ceo's aren't corrupt and making illegal deals to sell out what they don't even own)
It's not free: the point of "dumping" is that when competition is gone (and it certainly will be): china and NY,NY then quadruple the price
4X THE PRICE IS NOT CHEAPER. IT'S HELLISHLY MORE EXPENSIVE. and the damages caused are even more insanely expensive. NY,NY knew this all along making "walmart"
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
Gerrymanderer2
()
Date: November 27, 2018 12:13PM
All deficits grow under Republicans. They decrease under Democrats. That's been true for Obama and Clinton and for almost half a century.
Re: The trade deficit is getting bigger — despite all of Trump’s promises
Posted by:
Gerrymanderer2.
()
Date: November 27, 2018 12:21PM
arite, i like dik....Hey any young new register guys want to party w/ me...free smok.