Hacker News Reader

Comment by kemayo | Hacker News Reader

The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US.

This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.

https://finance.yahoo.com/economy/policy/articles/trump-brag...

View on HN

It also excludes money spent on services, which in most cases favours the US.

Look, my trade deficit with my barber is a real problem in our relationship. I need them to give me $20 for something, damnit.

> which in most cases favours the US

Used to favor the US. Trump's policies and behaviors are ruining the US' reputation as a stable trading partner by demonstrating what damage can be done by an idiot with unchecked power. The rest of the world is going to permanently veer away from US services because it's not impossible (and sadly likely) another feckless imbecile will get put in charge.

He doesn't have a view on trade deficits. To imply he does is giving him far too much credit. The "most powerful person on earth" in charge of the United States fundamentally doesn't understand trade deficits or tariffs.

We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.

Economically, it's a problem long-term. Dollars only have value if you can buy things with them. Japan, China, Saudi Arabia - countries we've had trade deficits with - have been buying our business, infrastructure, and real estate.

Not defending tariffs, but there's a reason people care about trade deficits.

Also, Trumps argument always ignores the bulk of US economy and exports: services.

Somehow we count shoes and timber but not gazzilions in financial and cloud services.

Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?

The experience of the trade deficit with the grocery store and the movie theater is more enjoyable, overall. I get films and ice cream and a good time out of it. From my employer I get a lot of sitting in meetings -- they have to pay me to make me put up with that!

My point is that reducing it entirely to "did I gain or receive cash-money from this?" isn't a particularly useful framing.

I think it's what can happen when we shift more towards an exchange orientation and away from a communal orientation. Or in other words, as we see the world more win-lose and less win-win.

Yeah that's the point. If you can get away with having a trade deficit not balanced by a surplus, that's a good thing because you get more movies and ice cream for less meetings. Trade deficits are good, people are just sending you free stuff.

I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person.

Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never at the whims of another.

> a real conversation to be had that a country should ensure it has strategic industries

Then let that be the reason for tariffs rather than the bullshit argument of trade deficit = taking money.

In academic and think tank circles it is. Too many people treat political theatre and, frankly, entertainment pieces as reflective of the actual policy debates when they are mass media designed to get clicks.

Right but this is actual policy. The Trump Administration does actual policy built off poorly formed fiscal reasoning. That's why we see blanket tariffs. There is no strategy.

Maybe some smart people, somewhere, would hypothetically have a strategy. Those people currently hold no power. It's not "political theater", it's our ACTUAL politics. It's just so ridiculous that it looks like theater. Which just means the situation is worse than you originally thought.

This is one view. Another view is that maintaining economic interdependence between countries — aside from making both countries richer via specialization and comparative advantage — is a great way to incentivize cooperation and prevent them from killing each other.

Examples here: https://www.hoover.org/research/when-trade-wars-become-shoot...

https://en.wikipedia.org/wiki/The_Great_Illusion

OK, so someone wrote a book and was wrong at the time. Times change. It's like saying in 2003 that nobody should launch a social network because the first one, Six Degrees, failed to take off. (https://en.wikipedia.org/wiki/SixDegrees.com)

Regardless the analogy of grocery shopping falls apart and shows a total lack of understanding the other sides worldview

Needs to be two-way though. What if we rely on China, but they don't rely on us? Well then they can destroy us at any moment. It needs to be MAD to be a deterrent.

It’s a silly question, since (short of a major life change or economic system change) you need the grocery store and the job to have decent quality of life.

You need to trade your labor for money, and you need to trade your money for food. I would argue that there isn’t a huge difference in the fundamental nature of those two trades. Framing them in terms of “trade deficits” is pointing out which direction money is moving in each instance, but fundamentally they’re both just trades.

Indeed that is true, which is the point of both OP(or at least my takeaway). Attaching a moral value to trade deficits or surpluses, as the current administration seems to be in favor of doing, is fairly nonsensical.

Reply on news.ycombinator.com