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Comment by masklinn | Hacker News Reader

> Everyone goes nuts when the US suggests implementing tariffs against countries that already have tariffs against us. You gotta admit, the message seems to be that other countries are allowed to protect their domestic industry via tariffs and the US is just supposed to deal with it, don’t wanna start a trade war!

You do know the US is already heavily protectionist and many tariffs are protections against the US's price dumping due to its heavy subsidies, right?

And that the US already has plenty of tariffs to boot?

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Yup. Heavily protectionist. Thats exactly how an unbiased economist would characterize US trade policy. Stop watching msnbc dude.

The USA became the world's largest evonomy with massive tariffs on basically all imports. Smoot Hawley Act anyone? Those were removed gradualy starting in the 1970's and lo and behold the trade deficit sky rocketted while the manufacturing economy plummeted.

i cannot see how the US has no/fewer/lower tariffs than their trading partners. here are some numbers for US-EU trade: https://www.statista.com/statistics/547412/average-eu-and-us...

and here's an article arguing why there's no US-EU trade deficit, in German, though: http://www.sueddeutsche.de/wirtschaft/handelsstreit-usa-eu-h...

what they argue for: sure, looking at goods, there's a deficit for the US. But once you take services and primary and secondary income into account, then the US actually cuts the better deal with the EU.

imv, trump/the current US gov are twisting the numbers to get a better deal.

Could you explain what services, primary and secondary income mean in this context and why they matter? Im sorry I don't read German.

> Those were removed gradualy starting in the 1970's [...]

> trade deficit sky rocketted

Is a trade deficit important to not have?

> manufacturing economy plummeted.

By which metric?

A trade deficit means that, on net, your trade partners end up with your currency and no goods to buy with it. So they start buying up assets in your country. Factories, companies, land, housing, bonds, etc. so by maintaining a trade deficit for so long, we have legally sold a large fraction of the assets in our country to foreign investors. (Foreign direct investment) How do you think Trump made his billions?

Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.

Having chineese bussinessmen buy up all the valuable real estate in our biggest cities is a result of the trade deficit.

Massive underemployment (more baristas fewer mechanics) is a result of the trade deficit.

A trade deficit means that, on net, you've sent a bunch of pieces of paper to a country and they have given you actual stuff in return. So then they give that money back to you by investing in your country.

>Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.

More English soccer teams are owned by Americans than all the russians oligarchs and arab sheiks combined.

>investing in your country

>foreign direct investment

>sheiks owning the sports teams and chineese businessman owning all the prime housing

We're saying the same thing

> We're saying the same thing

That's because you still haven't answered the original question:

>>> Is a trade deficit important to not have?

E.g., consider your examples:

>sheiks owning the sports teams and chineese businessman owning all the prime housing

Given that I'm not the type of person who buys sports teams and prime housing (of the sort purchased by Chinese businessmen), why should I care about that style of FDI? I mean, I guess it must suck for the American ultra-rich that they now have to compete with the Chinese ultra-rich for access to ultra-veblen goods like owning sports teams, but... why the hell should the rest of us care which mega-rich person owns the local sports team!? What possible material impact could that ever have on us?

The only type of FDI that effects my life is FDI in productive assets, like factories, and those are strictly good for me (more and better-paying jobs).

"So we lost the Toyota factory but on the plus side the sports team isn't owned by a Sheik" seems like a really dumb trade-off. What am I missing here...?

Source?

> Smoot Hawley Act anyone

generally regarded as making the depression worse.

I don't think I've ever seen someone defend that.

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