For those of us unfortunate enough to remember the Bush presidency, we probably remember that Bush was not a true free-trade promoting conservative like his father was. At one time, he tried to protect US steel production by imposing a tariff on foreign steel.
If you don’t remember this, that is because the tariff was short-lived. You see, the European Union immediately slapped counter-tariffs specifically targeting goods from important swing states. They went after goods such as orange juice (primary from Florida) and Harley Davidson motorcycles (from Pennsylvania) and other eclectic goods that had in common only that they were exclusively produced in a swing state. Bush backed down almost before the new policies were off the press.
Trump apparently also does not remember this, because he’s making the same mistake. The problem is, the EU apparently does remember and is giving more than a slap on the wrist this time. The EU’s new proposed counter-tariffs target red states in addition to swing states, going after Kentucky bourbon and a variety of agricultural goods in addition to the previous list of swing-state goods. Will history repeat itself again and the tariffs disappear, or will we all suffer the consequences of a trade war?
Friday, Mar 2, 2018 · 12:49:33 PM +00:00 · rufe
For the love of God:
Trade deficits have to do with investment. For example: if people in a country (USA) spend a lot, they automatically buy more imports than people in another country (China) where they save a lot so you are guaranteed a trade deficit.
Alternatively: if one country (USA) has attractive assets for foreign investors their currency is automatically slightly overvalued and they will always have a trade deficit. Since the dollar is the global reserve currency, this is also the case.
Also, trade deficits are not points, on their own they mean virtually nothing.