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Let’s Check In on How Well Tariffs Are Reducing US Trade Deficit

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6 comments on Let’s Check In on How Well Tariffs Are Reducing US Trade Deficit

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Advance Trade Data

The data point -91,207 is from today’s Advance Indicators Report 

  • The international trade deficit was $91.2 billion in June, up $3.0 billion from $88.2 billion in May. 
  • Exports of goods for June were $145.5 billion, $0.5 billion more than May exports.
  • Imports of goods for June were $236.7 billion, $3.5 billion more than May imports.

Trade Wars Are Good and Easy to Win

As I recall, “trade wars are good and easy to win“. Now, where did we hear that? 

Given that Biden mostly left Trump’s tariffs intact and even increased tariffs on Canadian lumber, the above chart is quite amusing. 

It’s true that Trump reduced the goods and services deficit with China, but imports shifted to Vietnam, Taiwan, Mexico, and other places.

What About Services?

Hooray we have a surplus in services! 

Note however, that the services surplus peaked in January of 2018, right about when Trump launched his massive trade wars with the world. 

Trump made his “”trade wars are good and easy to win” Tweet on March 2, 2018. 

Biden Even More Committed to Economic Madness

The names changed but the policies didn’t. Biden is even more committed to economic madness than Trump!

Greens Hijack Biden’s $3.5 Trillion Budget Proposal

Smith told The Hill that while the details of the standard will have to be worked out in negotiations, she’s hoping to see a requirement for 80 percent clean electricity by 2030.

They plan to achieve this by taxing imports, that of course means tariffs. 

For details, please see The Greens Hijack Biden’s $3.5 Trillion Budget Proposal

The Stagflation Threat is Very Real but Congress Holds the Key

If you want stagflation, a tax on energy is a good way to get it.

For further discussion, please see The Stagflation Threat is Very Real but Congress Holds the Key.

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Mike Shedlock

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goldbear77
goldbear77
4 years ago
yes Lump was the single most finance illiterate US President since… ever
@KidHorn – I agree with that comment but its not backed by persistent facts.  The US has been subsidising key industries for 200+ years. The only reason it argued for globalisation and lowering of trade barriers from the 70s generally was that it has the effect of subsidising US investment banks which are the world’s largest commercial lenders.   So even that was a subsidisation on the DL.
China’s IP Theft and unwillingness to allow 100% foreign ownership and equitable capital access were legitimate targets for dispute and address.
But tariffs are both self punishing and also a last resort not a first strike.  If Lump had called China out on the issues of substance, in concert with Europe etc and China still held out – tariffs would ultimately be a reasonable weapon to use.  But only in concert with other major trading blocs or they dont disproportionately damage the target.
Instead – he just launched a haymaker with no policy – presumably for domestic political reasons – or quite likely he simply doesn’t understand finance at a high level. 
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ThaomasH
ThaomasH
4 years ago
Tariffs raise the price of some tradeable goods at the expense of others so the “protective” effect on importable goods is an anti-protective tax on exporters.  The is no reason to think that the net effect would reduce the trade deficit and so it is no surprise if they do not.
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RonJ
RonJ
4 years ago
“BREAKING: Clean Electricty Standard is included in budget deal.

CES is the cornerstone of the progressive, practical transformation to a clean energy future we urgently need.”

We have another flex alert in California today. People are urged not to do laundry until after 9pm. Zero Hedge mentioned the other day, that California is prohibiting sales of Dell gaming PC’s due to their power usage.
What will be prohibited next?
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Anon1970
Anon1970
4 years ago
Reply to  RonJ
How about banning the use of charging stations until 9PM?
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KidHorn
KidHorn
4 years ago
Without knowing what the deficit would have been without tariffs, you can’t state whether or not they’re working. I’m not in favor of tariffs, but I am in favor of tariffs when the other sides aren’t trading fairly.
As far as clean energy goes, the only realistic way to make a significant dent is with nuclear power. Even if cars are all electric, we’ll need to generate a lot more electricity to power them. And I doubt solar and wind will never account for much more than 10% of world demand.
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ThaomasH
ThaomasH
4 years ago
Reply to  KidHorn
Let’s just put a tax on net CO2 emissions, remove regulatory obstacles to nuclear and let the entrepreneurs fight it out.
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