Trump has made reducing the U.S. trade deficit with China a prime target of his administration, but new figures out Wednesday show that it hit a record for a second straight year under his watch.
a devaluation of the dollar could narrow the trade deficit by increasing exports faster than imports.When U.S. imports more than it exports, the trade balance shows up as a negative number in the formula to calculate gross domestic product, creating the impression it subtracts from economic growth. But McDaniel said that’s not really an accurate way to think about the figure, because imports are only subtracted from exports to avoid counting domestic consumption twice.
The trade deficit is part of a larger set of economic data known as the “current account.” This measures balance of trade and investment incomes. The flipside of the current account is another set of data known as the capital account, which measures changes in longer-term investment positions. The capital account and the current account always zero each other out.
Trump could reduce the capital account surplus, and indirectly reduce the trade deficit, by taxing new inflows of foreign investment, McDaniel said. But that would be contrary to his goal of encouraging foreign companies to build more facilities in the United States.Trump is trying to use U.S tools to attack a problem created by global factors, a point that economists have repeatedly made over the past two years to little avail.
The agreement Trump is trying to reach with China right now is expected to include major new purchases of U.S. agricultural commodities, energy products and manufactured goods. That could make a short-term “dent” in the two-way trade deficit, but over the long term the deficit will continue to increase as long as United States continues its low savings rate, McDaniel said.China’s own economic growth slowed significantly in 2018, which reduced demand for American goods.
“The deficit has grown not only because the economy is booming, but because the president’s tariffs have caused all kinds of wacky changes in trade patterns,” he said.
Österreich Neuesten Nachrichten, Österreich Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Cramer: Why Trump could decide to walk away from a trade deal with ChinaJim Cramer says Trump could abandon trade negotiations with China, but it could come at a cost he might not want to take on.
Weiterlesen »
Pompeo says China trade deal has 'got to be right': interviewU.S. President Trump will reject a U.S.-China trade deal that is not perfect, bu...
Weiterlesen »
China won't judge you: Why Saudi Arabia's crown prince is betting billions on AsiaRiyadh is strengthening and diversifying its international relationships based on both economic and geopolitical interests.
Weiterlesen »
Why China doesn't want a India-Pakistan conflictBeijing is on the verge of being sucked into an India-Pakistan crisis, amid rising tensions in the Kashmir region that borders China.
Weiterlesen »
Opinion | Why is China refusing to stop the flow of fentanyl?American law enforcement officials complain that China’s police are not crime fighters but rather protectors of the Communist Party.
Weiterlesen »
Why did the “China shock” hurt so much?For the same reason that earlier ones hurt less
Weiterlesen »
After Trump walked out on Kim Jong Un, don't expect a US-China trade dealBeijing simply cannot accept Washington's control over its economy, Michael Ivanovitch writes.
Weiterlesen »
Trump, Lighthizer dispute may result in 'inadequate' and 'weak' US-China trade deal, expert saysU.S. President Donald Trump and his Trade Representative Robert Lighthizer recently sparred over what to call the tariff agreement that the U.S. and China are negotiating.
Weiterlesen »
Trump reportedly pushing for trade deal with China in hopes of boosting stock marketPresident Donald Trump is pushing hard to strike a trade deal with China with the hopes of lifting stock prices further, Bloomberg News reports.
Weiterlesen »
U.S. trade gap with China reaches all-time high under TrumpThe U.S. trade deficit in goods with China set a new record, despite Trump's efforts to rein in what the administration views as Beijing's trade transgressions
Weiterlesen »