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Why does the U.S. always run a trade deficit?

libertystreeteconomics.newyorkfed.org

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Re: Why does the U.S. always run a trade deficit?

#281

Post by lesuorac »

esseph wrote: post #69
lesuorac wrote: post #62

Earlier quoted context omitted.

Isn't that just a software thing (if at all)? It's not like Canadian lumber mills conquered the world. Ford F-series isn't the highest selling car in the world.

How many countries are US fast food franchises in? Music? Movies? Bleed over from US social media? There's something to that, I think.

The original comment was "if you can conquer US market. you can pretty much do that elsewhere".

US Fast Food has not conquered street vendors.

A quick look at a French theater [1] shows 2 American movies, 2 Spanish movies, and 1 French movie. French culture might be dominated by foreigners but 2/5 isn't domination. Movies also have a similar network effect to software where it's preferable to see the same movies as other people to have a talking point.

Social media (WhatsApp included in here) is probably accurate but that's software which I already gave an out to.

> There's something to that, I think.

There's definitely something to making a compelling product that takes over a local market being desirable by a foreign market. I just don't think there's something special about winning say the US car market over winning the Chinese car market (There is something special about winning the US/Chinese market over winning the Irish market though -- Size).

However, for many goods that aren't protected by a monopoly a local supplier is going to be able to undercut your distribution costs. That's why Finish McDonald's uses Italian beef [2].

[1]: https://www.ugc.fr/films.html

[2]: https://www.mcdonalds.com/fi/fi-fi/tuote/pepper-n-bacon.html

Re: Why does the U.S. always run a trade deficit?

#282

Post by tastyfreeze »

analog31 wrote: post #279
tastyfreeze wrote: post #153

Earlier quoted context omitted.

The only policy that will increase savings rate is a stable or depreciating currency. People are incentivized to use an inflationary currency so they can maintain value.

But they can spend it on stocks, with the hope of maintaining or increasing value. Thats savings, right?

Who doesn't love the value of their savings being built 100% on the speculation of the public perception of made up things?

Re: Why does the U.S. always run a trade deficit?

#283

Post by ta1243 »

ryandrake wrote: post #170
sigmaisaletter wrote: post #63

Earlier quoted context omitted.

The chain of thought goes like this: -american labour is expensive -because of tariffs (or geopolitics) cheap asian labour unavailable -investment in automation research -first Gen automation is expensive -further research -2nd Gen automation is price-competitive with american labour -iterate n times -Nth Gen automation is price-competitive with asian labour > why doesn't it happen with the chinese supply chain The i…

Americans will not accept the quality-of-life sacrifice of their labor being competitive with Asia. It's never happening. The only way US manufacturing will be competitive with China's is if it is 100% automated from the mines to the store shelves.

Which means 100% of the money goes to the owner. At least now some goes to foreigners who watch stuff on youtube so american workers get a little of the money.

Re: Why does the U.S. always run a trade deficit?

#285

Post by ta1243 »

hollerith wrote: post #228
ryandrake wrote: post #164

Earlier quoted context omitted.

But, how does changing some number on a "trade deficit" spreadsheet materially affect Apple or Americans? Apple pays slightly more taxes to the government than it did before. Big deal. There is no incentive to demolish an automated factory in China and re-build it in Nebraska.

Apparently the US can sustain a trade deficit with the rest of the world, but certainly this ability to sustain one is not unlimited, so lowering the trade deficit tends to help Americans by making it more likely that the US economy can continue to import things (including some things are are available only outside the US, e.g., fruits that only grow in tropical climate).

How will apple being in Nebraska make any difference to Joe Bloggs from Oklahoma importing something?

Re: Why does the U.S. always run a trade deficit?

#287

Post by Suppafly »

I saw a comment here or reddit that basically said that trade deficits aren't real anyway since we're essentially exporting dollars and importing goods. It changed how I thought about these trade deficits a bit. I wasn't overly concerned in the first place, since it seems like a right-wing boogeyman than an actual problem, and also being a country and mostly imports high end finished goods seems like winning at capitalism.

Re: Why does the U.S. always run a trade deficit?

#288

Post by ta1243 »

timacles wrote: post #252
kylebenzle wrote: post #81

Earlier quoted context omitted.

Maybe the military could just start forcing people to buy all US made products instead of just our currency?

Trust me they are exploring this

That's what the UK was doing before WW1, when private army (including warships) from a private British company attacked places like Guangzhou, before the UK government forced their terms of trade on China.

History doesn't repeat itself, but it rhymes.

Re: Why does the U.S. always run a trade deficit?

#289

Post by mitthrowaway2 »

alephnerd wrote: post #261
mitthrowaway2 wrote: post #256

Earlier quoted context omitted.

What I mean is that if the CNY properly appreciates relative to the US dollar, that CNY60k ($8,000) EV becomes a CNY60k ($16,000) EV. The median Chinese wage goes from CNY 34k ($5,000) to CNY 34k ($10,000). Meanwhile imports of agricultural products and other things into China becomes cheaper, and the cost of food gets lower. Most expenses an average Chinese worker pays might be unaffected given how self-reliant Chin…

> Meanwhile imports of agricultural products and other things into China becomes cheaper, and the cost of food gets lower Food costs are already dropping in China [0]. That is not what is dampening Chinese spending. > if the CNY properly appreciates relative to the US dollar, that CNY60k ($8,000) EV becomes a CNY 60k ($16,000) EV. The median Chinese wage goes from CNY 34k ($5,000) to CNY 34k ($10,000). But a critical…

... Yes. Although, you've phrased that like it's in some way a rebuttal to what I wrote, when it's actually consistent with what I said.

Re: Why does the U.S. always run a trade deficit?

#290

Post by silisili »

Suppafly wrote: post #287

I saw a comment here or reddit that basically said that trade deficits aren't real anyway since we're essentially exporting dollars and importing goods. It changed how I thought about these trade deficits a bit. I wasn't overly concerned in the first place, since it seems like a right-wing boogeyman than an actual problem, and also being a country and mostly imports high end finished goods seems like winning at capit…

I mean, you can say the same thing about every purchase you make. The potential problem is that you don't have infinity dollars, so if you aren't getting them back, you have to make more.
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