Trade policy is at a historical crossroads — a jump ball, as it were. As we enjoy the NCAA Tournament, let’s look at four similarities between trade and college basketball.
Against a backdrop of high profile trade and investment disputes between the United States and China, American hydrocarbon exports to China are booming. U.S. energy commodity exports to China went from $2.6 billion in 2016 to $8.6 billion in 2017.
While President Trump believes China’s large trade surplus shifts the balance of power in a tariff war to the United States, China can respond by punishing U.S. affiliates, who are sitting ducks in a trade war.
Twice a year, the U.S. Treasury Department issues a report required by Congress that assesses the foreign exchange policies of our major trading partners. Our experts break down the key take-aways from the latest FX Report.
A NAFTA negotiation could address the “microeconomic” factors that affect trade flows would increase the level of trade between the United States and Mexico and make U.S. consumers better off, but it wouldn’t have much effect on the balance of trade. On the other hand, economic growth in Mexico would achieve that effect by stimulating demand for more U.S. products.
In 2016, the United States ran a trade deficit of $500.6 billion. If President Trump wanted to reduce the U.S. deficit with Mexico or China, all he has to do is change the way we count it.
Americans like to play to win. When it comes to international trade, however, we shouldn’t use the size and trend of the national trade deficit as a way of scoring trade policy. It’s like using the size of players’ salaries to evaluate whether you had a winning season.
Sure, it’s good when American companies export goods and services to the world. But imports make many American-made products more competitive as well as enriching our lives as consumers – they are part of the secret sauce of what makes our economy work so well.
Every trade negotiation is an exercise in pushing the government-imposed cronyism out of the way and freeing up space for markets to work, which is good for consumers and for economic freedom.
Trade agreements aren’t the principle factor to blame for the majority of U.S. job losses or the decline in earnings. Many factors determine total employment.