Comment by rayiner | Hacker News Reader

Comment by rayiner | Hacker News Reader

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All the “smart” people have been going in the wrong direction for 40 years—pursing short term profits and encouraging wasteful consumption—so you got the toddler. Let that be a lesson.

Our trade deficit in the 1990s was under 1% of GDP. Some people may not remember that time, but we had toys on the shelves, toilet paper, etc. Not at all what the doomers are saying will happen without unrestricted free trade.

If trade deficits are so great, why does the EU try to maintain a consistent surplus? I can accept that Trump is an idiot and doesn’t know what he’s doing on trade. But I think the EU bureaucrats are pretty smart! I think the Germans and Chinese and Japanese are very sharp and have deliberately sought to maintain manufacturing-oriented economies with a large trade surpluses.

You know who else ran large trade deficits? The UK: https://ercouncil.org/2016/chart-of-the-week-week-19-2016-uk.... And it seemingly worked for awhile so long as people gave a shit about the pound and London banks, but that proved to be extremely fragile. The 2008 recession destroyed that and erased the UK’s higher standard of living.

I don't know about "trade deficits are good", but trade deficits are basically meaningless in isolation.

I have a trade deficit with my local grocery store. Does that mean I'm being taken advantage of?

Imagine a small country rich in raw materials but whose people are otherwise poor. They export tons of valuable minerals to the U.S. but the profits are kept by an elite few who spend most of their time outside the country, and nobody inside the country has enough wealth to buy goods from the U.S. The U.S. would have a large trade deficit with that country, but would be benefiting enormously from the relationship. In this scenario, the country's people are certainly being taken advantage of, but the U.S. is absolutely not.

That's the problem with the trade deficit: it tells you almost nothing on its own. You can manufacture scenarios between countries involving a huge trade deficit, surplus, or an even balance, but where trade is fair, or where either country is taking advantage of the other. It's just not a useful number on its own.

To extend your grocery store example: you have a trade deficit with your grocery store, but you have a trade surplus with your employer! You’re not running a structural trade deficit, and it would be bad to do so.

Your example about small countries is irrelevant because nobody cares about the trade deficit between the U.S. and Bangladesh. Virtually the entire trade deficit is the EU, China, Japan, Vietnam, Canada, and Taiwan. The EU, Japan, and China are big, diversified economies and there is no reason we should have a trade deficit with them.

> Your example about small countries is irrelevant because nobody cares about the trade deficit between the U.S. and Bangladesh

Except for the person in charge of America's trade policy, lmao

He doesn’t care, about those other countries. It’s just posturing.

He literally did put tariffs on them lol, what the fuck?

"He won't do massive tariffs, it's just posturing"

"He won't do mass deportations, it's just posturing"

"He doesn't care about those countries, it's just posturing"

"He won't ignore due process, it's just posturing"

"He won't ignore SCOTUS's orders, it's just posturing"

Meanwhile you're attributing beliefs like "trade deficits are great" to the other side so you can win imaginary arguments with them. Absolutely hilarious stuff.

> He literally did put tariffs on them lol, what the fuck?

I didn't say he won't put tariffs on those countries, I'm said he doesn't care about them one way or the other. Those countries have tariffs because Trump wanted a simple, blanket policy.

Is it posturing or a desire for simplicity?

What is simple about tariff rates changing literally day by day via all-caps blurted tantrums on Truth Social? I am actually curious for your direct answer to this.

He thinks that a trade deficit is an actual subsidy, giveaway, or "loss" to the other country. He has said it for literal decades. Sure, he may care more about bigger thieves than smaller ones, but all signs point to him to caring about every instance of "loss" to foreign countries. Both his words and his actions are in accordance with my theory. Neither is in accordance with yours.

He is an actual stupid person surrounded by sycophants. It's a really consistent explanation! No need for this whole "he didn't say that → he didn't mean it → he's just posturing → it's for simplicity → it's Good Actually" thing.

> I didn't say he won't put tariffs on those countries, I'm said he doesn't care about them one way or the other.

How do you know that?

We need a Donald Trump Apologist version of the Narcissist's Prayer.

He didn't say he was going to do the thing. It's liberal propaganda.

Okay, he did say he was going to do the thing, but he's not. It's just posturing.

Okay, he did the thing. But it's good! Everything will be better!

Okay, it's not making everything better. But it will soon! 5D chess!

Okay, everything is worse. But it's liberals' fault.

Okay, it's his fault. But we deserve it.

Even if it were just posturing -- which frankly I don't believe based on the fact that they are now going into effect -- do you at least see how disruptive it is to American companies for him to continuously change his position? There have been 10 executive orders related to tariffs since February 1st. How can American companies possibly make any short, medium, or long term plans when the administration is constantly changing critically important things to their business on Trump's whim?

If it is just posturing, do you worry Trump will improperly benefit from it? UAE invested $2BN in his memecoin today. Maybe the posturing will lead to other countries making similar "investments."

> Your example about small countries is irrelevant because nobody cares about the trade deficit between the U.S. and Bangladesh.

Yeah, it is not like someone would create a U.S. tariff policy with tariffs set based on (goods trade deficit with the US) / (bilateral trade volume with the US), irrespective of size of the country, because no one is stupid enough to care about the (goods or general) trade deficit between the U.S. and, e.g., Bangladesh.

Why do you think that means anyone actually cares about those other countries? Applying a blanket rule as a starting point avoids having to single out the countries you actually care about at the outset.

Virtually our whole trade deficit is China, the EU, Japan, India, Vietnam, and Canada. Should we have just singled those countries out by name and grouped them together for purposes of imposing tariffs? Don't you think lumping Japan together with China like that would piss them off even more than tariffs would do anyway?

The only trade deficits that matter are ones that create security dependency. Biden recognized that at the tail end of COVID and that's why they onshored chip manufacturing because so much modern tech needs chips.

In world wars, America never wanted to stop being militarily capable so they spend almost a trillion ensuring there's no deficits of the ability to wage war.

No one in government prior to trump was operating under the idea that all deficits are ok. Strategic deficits are bad. Now all deficits are bad, which is not the case, at all.

America would not suffer any reasonable damage having a coffee bean deficit. Or a tea deficit. Or beer deficit.

The terms of the current regimes debate is simply trying to use the word tariff in place of national sales tax and corrupting it as a Nazi isolationism tool.

> The only trade deficits that matter are ones that create security dependency

Most of the trade deficits create a security dependency, because you need to secure the entire supply and skill chain. Prior to World War II, the U.S. had largely demobilized its military. But the U.S. built the world’s largest military virtually overnight thanks to its industrial capacity. At one point a Ford factory was churning out one B24 bomber every hour: https://www.assemblymag.com/articles/94614-how-fords-willow-....

Doing something like that requires a depth of capability the U.S. no longer possesses, but China does. To build warplanes you need, for example, aluminum and titanium machinists. Where are they? In China making Macbook cases.

China has 230 times the shipbuilding capacity of the U.S.: https://www.csis.org/analysis/threat-chinas-shipbuilding-emp.... Or if you think the future of warfare is drones instead of planes and ships, guess who makes all the drones?

None of those things are addressed by blanket tariffs.

You need to define "most of the trade deficits". Start with the island of penguins, and go up.

That’s bikeshedding from people who tried to give us the TPP.

Can you link to one person with any sort of platform who has said "trade deficits are great?"

Can you link to any left-of-center elected official who has advocated for "unrestricted free trade?"

Or are you making these people up so you can win imaginary arguments?

What is actually happening matters more than what anyone says. “Trade deficits are great” and “unrestricted free trade” reflects the status quo. The weighted average tariff rate in 2016 was just 1.5%. The trade deficit has grown to over $1 trillion.

Minor surgical changes aren’t going to move the needle when you have an economy addicted to debt-fueled consumption of foreign goods. Anyone who isn’t proposing major structural changes is endorsing the status quo of “trade deficits are great” and “unrestricted free trade.”

So imaginary people and imaginary arguments, got it.

The “imaginary arguments” are the ones about surgical changes to trade policy. They’re imaginary because they have no basis in anything those people have the political will to do.

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