US trade deficit widens by the most in nearly 34 years in November
finance.yahoo.comas a non-USian, I've been doing my part to increase the US trade deficit with my country
in the last year I've stopped buying any product from american companies if there is another viable supplier, even if it costs more
heinz, coca-cola, five guys, goodyear (I needed new tyres), aws/gcp, lays, mars, ... all removed entirely
Looking at what you’re cutting, you might also be living healthier too!
Although these food products are often regionalized.
yes it seems to be win win, like just completely giving up soft drinks
I hadn't realised quite how many "UK" brands were owned by US conglomerates
a scarily high percentage
None of these products would be made in the US, though ... and none would affect trade imbalance ... so the net effect might only be to increase inefficiency in your own country
how much do you think of my £1 can of coke stays in the UK?
maybe a quarter?
the rest will be a "licensing fee", which goes straight to Atlanta, Georgia
(well, now it doesn't)
Are cans of coke only £1? The dollar is really weaker than I thought
Its just sugar water.
What if it's Coke Zero?
It is definitely striking that a 2L bottle of local municipal water plus caramel color and a pinch of aspartame costs $2.65
Fucking insane. Coke has a higher label tax than Apple.
The other infuriating part is that the generic brand soda is also expensive for some reason. What an efficient market, when generic water can maintain an insane profit margin.
Liquids are heavy. A large chunk of the retail cost in bottled drinks of all types is transport and distribution.
The same is true of liquid detergents and soaps and anything else you buy that is mostly water - even fresh produce.
But GP is boycotting big corporations, and presumably replacing them with local businesses. Unlikely any US small businesses because they don’t advertise internationally (and usually don’t ship). In this case, two wrongs make a right: he’s helping his nation’s smaller businesses and not hurting those from the US.
How would investing in locally produced stuff increase inefficiency ?
If you pay someone 3x for work/service/product, x is the price and 2x is what you pay to encourage them to make/do the things instead of the people who could/would do it for x.
However, you're not paying 3x. I assume you're not really paying anything notably higher than x, right? So the encouragement is nearly zero.
Lack of scale or expertise (competitive advantage).
I've been doing the same, but focusing on American-made products first, the more local the better and even if they're 5x as much, and then moving down the line to western products and only reluctantly buying products from adversarial countries.
Supporting local businesses and moving away from globalization, which you also seem to support, is a good move for everyone.
Generally the framework is:
And so forth.Buy local/shop at neighborhood businesses preferably selling American-made products or at least western products. When traveling we try to do the same in the country we are located in, but obviously not perfect about it. Buy American generally, including online retailers. The smaller and more local the producer the better. Try and identify American companies that are trying to source from good/ethical suppliers like Patagonia, and avoiding Chinese-owned ones (Arteryx RIP). Buy western - so that's your silk ties from Italy (something like E.& G. Cappelli), maybe French wine, you get the picture. My tires are Michelin and they are fantastic. I understand that the people on the Internet from Europe are really mad at the US (most folks generally don't care at all) but I'm not holding that against them. Same for Canada of course. Reluctantly purchase computers/phones and such made in China simply because there's no alternative.Awful products (Five Guys, Lays chips, &c.) are generally avoided even if they're American. Same applies globally. There's no hard and fast rule here for me, but those are some of the general considerations. OP if you like Five Guys style you should try making at home. A great burger isn't too hard to pull off for MUCH cheaper!
The article seems reactionary. Imports increasing, for example, maybe be due to temporary (or even permanent!) purchases from ex-US suppliers for things like increasing manufacturing capacity here in America. Obviously the effects and reconfiguration of the global economy isn't going to happen overnight.
Mainstream economists have broadly always said that the trade deficit is a good thing for the United States (I can't tell you the number of NPR and Planet Money podcasts with experts I've listened to that have said as much, and also thank you, OP) because it means we're consuming more and receiving more investment and we're trading worthless dollars for the consumption of goods. If you also aligned with the mainstream economics view that tariffs are bad, you'd likely look at an increasing trade deficit with tariffs in place as a very good outcome at least in some respects.
> Mainstream economists have broadly always said that the trade deficit is a good thing for the United States
yes, this is the traditional position
but the underlying assumption is that USD remains the world reserve currency
and there's now an entire western hemisphere no longer interested in maintaining that
> and there's now an entire western hemisphere no longer interested in maintaining that
Well the USD is one of the world's reserve currencies, not the only one, though of course it's the dominant one. A reserve currency is just a currency that central banks or other significant financial institutions hold "in reserve" for liquidity purposes and so on. Even if the USD was no longer the dominant one, which isn't necessarily great, it hasn't seemed to have been that big of a problem for the EU.
I also don't think there's an entire western hemisphere that is no longer interested in maintain "that". Despite online noise, and a few symbolic selling of treasuries, nothing has really changed. You have to remember that politicians, including EU politicians talk a different game to the public than they do when they're sitting in rooms together at Davos or wherever. There are other considerations. How good for the EU will it be if the US collapses into financial ruin (it won't)? Who is going to backstop their militaries against Russia or other bad actors? The EU can say well we're going to go sell all these treasuries, well they become worth less and less and collapse the global economy. All you hear about on the Internet is the US's dirty laundry. It's the same thing with China and their military and economy. Most people can't speak about their failures because they're not aware, we only talk about the United States (and EU and others of course) and those failures and we don't speak in terms of incentives and actions and reactions.
"China has hypersonic missiles the US Navy is doomed!" is often parroted - yet who can speak intelligently to what the United States has done to negate or address that concern? Very few. Why is that? Well we're all reading the same articles about China's capabilities - it's propaganda.
I also don't see the USD going anywhere, anytime soon since the US military enforces the petrodollar system. But sure let's talk about some Swedish pension fund selling $50bn (7% of Elon Musk's net worth - screw that guy) worth of treasuries and call that the death of the United States economy.
Please don't take this as a defense of objectively bone-headed things the United States is doing either, I'm just pointing out that it's much more complicated than what your comment seems to suggest.
> How good for the EU will it be if the US collapses into financial ruin (it won't)? Who is going to backstop their militaries against Russia or other bad actors?
This would be a bigger concern if the US hasn't, in words, direct action, and inaction shown that it is no longer interested in doing that in any case and is, instead, both joining Russia as a threat to Europe.
In military terms Europe is quite capable of defending itself against Russia
Germany & UK combined already spend more on defence than Russia and then we can start counting France, Poland, Netherlands, Scandinavians etc
Europe's military spending dwarfs Russia's
> How good for the EU will it be if the US collapses into financial ruin (it won't)?
this isn't the aim
the aim is to decouple enough so you can't be blackmailed
which unfortunately is quite a herculean task, but hey, you've gotta start somewhere
> The EU can say well we're going to go sell all these treasuries, well they become worth less and less and collapse the global economy.
they won't sell them simultaneously, because that would be crazy
but they will change their portfolio allocations over time in response to these new risks made obvious from the hourly yelling out of the white house
which increases US funding costs, decreasing its competitiveness, which is a vicious circle
if it goes on long enough, other trading partners won't want to be paid in dollars at all
I wouldn't frame EU activity as decoupling from the United States, though the irony of "decoupling" from the US and cozying up to China is super cringe* despite our bombastic and rude American president. *
Instead the EU is engaging in increasingly protectionist activity to build more domestic industry. I don't have a problem with that, but I'm also more on the protectionist side given the current state of global affairs and the need for the US to decouple from China - or is it only the EU that gets to decouple from a major trading partner and the US isn't allowed? At least that's what is parroted on the Internet. :)
* Just a quick note, there's a lot of uproar on the Internet over Greenland. Deservedly. But if the EU "decouples" from the US, there's no incentive for the US to not, for example, take over Greenland. These are the kinds of push-pull engagements that are continually failed to take into account by most commentaries and in most discussions. Again it's centered around what the EU will do, or what China will do, and so forth and the analysis never makes it past this, despite the most important activities happening downstream from initial activities.
* I'm an Ukraine hawk - US should have went straight to war with Russia over the invasion - being overly simplistic here but just to illustrate my hawkish-ness. But the EU is sitting here telling us it's this huge problem that Russia is invading Ukraine, yet they're happy to increase cooperation and trading with China who is providing support to Russia for their invasion? Of course, these things are all part of a negotiating mix. Maybe increasing trade will help China stop helping Russia's war against Ukraine, but if we wanted to stop analysis at the very first thing we see as everyone seems to want to do with respect to the EU or China, we could just look at that activity and say, well, maybe we shouldn't help the EU here and if they really think Ukraine is a problem they should take these other actions instead, whatever they may be.
> Instead the EU is engaging in increasingly protectionist activity to build more domestic industry.
yes, this is why it was created, it's why it exists!
I have absolutely no problem with the US deciding to re-balance its economy using tariffs, that is its sovereign right
but I have a problem with it using them as a tool of coercion against its "allies" to achieve foreign policy objectives
and not to mention the direct threats of annexation
> But if the EU "decouples" from the US, there's no incentive for the US to not, for example, take over Greenland.
if you assume the decoupling has completed, then the rest of the west would by definition be capable of defending itself without being subject to coercion/blackmail
(there's also the the two nuclear powers treaty bound to defend it)
The USA would take Greenland anyways, the current USA doesn't understand or care about the concept of "friends", being or not being a friend is irrelevant.
> But if the EU "decouples" from the US, there's no incentive for the US to not, for example, take over Greenland.
You're saying "I had sex with my best friend's wife and now he doesn't want to see me anymore. This is stupid: if he doesn't want to be my friend, then there is no incentive for me to not have sex with his wife. He should still be my friend".
If you go like this in real life, I wonder how many friends you have :-).
I don't think that's a good analogy.
But if you want to stick with it, in this scenario the situation would be you aren't friends, and don't intend to be because you both made each other really mad, and by having sex with the wife she gives you a lot of good stuff that you want and you're not really concerned with your former friend's feelings.
> in this scenario the situation would be you aren't friends
You think that the Europeans bought defense systems that depend on the US without thinking they were allies?
We are still allies. I think your comment here is just speaking to the limitation of your analogy.
On the contrary, I think it explains our disconnect. If you consider that it's perfectly fine for an ally to threaten to invade ("allies are not friends"), then it may be difficult for you to understand the reaction of people who strongly disagree (and consider that "allies are friends").
IMO, when a country threatens to invade another country, it becomes an enemy.
Back to Europe, I don't remember hearing that China threatened Europe militarily. Russia does, and the US as well. So I am not completely surprised when people in Europe say that they would rather buy Chinese products than American products. First because they haven't feared of a Chinese invasion in the last weeks, and second because China does not behave like an enemy. Rather a partner with divergent interests. When China threatens Taiwan, Europe may disagree, but they don't feel like Chinese people may kill European people in the next few days.
The US behaves like an enemy, like Russia. Are you surprised that Europeans don't want to buy Russian products? Economically, it's not good for Russia and it's not good for Europe. Just like tensions with the US are good for neither of them.
> If you consider that it's perfectly fine for an ally to threaten to invade
I don't consider it fine, but I don't think this means we're also not allies. I understand the reaction. I largely disagree with our actions. The US would still come to the defense of France, Germany, UK, &c. We are still in NATO, we still participate in and lead military exercises, we still have troops stationed throughout NATO-aligned countries, and more.
> Back to Europe, I don't remember hearing that China threatened Europe militarily.
Ha, well they're not threatening Europe they are actively providing assistance in terms of materials and equipment and other support to Russia as it continues to wage war against Ukraine and prepare for a broader war against Europe. Oh and sprinkle in some hacking, and disinformation campaigns to fuel European far-right groups too.
The main criticism I have here of the EU is that they seem to think the US should come and help Europe, provide assistance against Russia, &c. but when it comes to China all of a sudden it's "they didn't attack us, they aren't threatening us, &c" - you can't have it both ways. If you don't think China is a problem or whatever, you can't blame the United States for pulling forces and support from Europe when the US feels threatened by China. Russia isn't threatening us, not going to attack us, so maybe we should just do some good trade deals with Russia and unlock resources. This is exactly how Europe is behaving with respect to China.
> I don't consider it fine, but I don't think this means we're also not allies. I understand the reaction. I largely disagree with our actions. The US would still come to the defense of France, Germany, UK, &c. We are still in NATO, we still participate in and lead military exercises, we still have troops stationed throughout NATO-aligned countries, and more.
As someone living in Europe: I don't trust the USA would, that's the reality now, there were ties spanning decades which I thought would take a lot more effort from any US administration to break but alas, it's been broken, I simply do not trust any of that right now. The US definitely wouldn't come to the defence of the Baltics which would be the frontline of any start of Russian aggression towards the EU.
Sorry to say but this is not the reality anymore.
> Oh and sprinkle in some hacking, and disinformation campaigns to fuel European far-right groups too.
The US admin is cozying up with many far-right groups in Europe as well, given that China hasn't directly threatened to annex any territory from European countries we can see how between US vs China, China is becoming the more reliable partner. It's a quantifiable measure, they are predictable, it's easier to deal with.
> If you don't think China is a problem or whatever, you can't blame the United States for pulling forces and support from Europe when the US feels threatened by China. Russia isn't threatening us, not going to attack us, so maybe we should just do some good trade deals with Russia and unlock resources. This is exactly how Europe is behaving with respect to China.
How exactly is China threatening the USA? You all got into this China pivot because of how economically powerful China has become, it's just Red Scare 2.0 but against a hyper-capitalist country with a veneer of "communism" from the party's name.\
Because Russia is directly invading a country in our continent, directly threatening European countries with nukes, tell me more on how the USA is threatened by China.
Maybe you should do good deals with Russia if that's how you think, you're displaying exactly the reason why we in Europe don't really feel keen on dealing with the USA anymore.
> As someone living in Europe: I don't trust the USA would, that's the reality now, there were ties spanning decades which I thought would take a lot more effort from any US administration to break but alas, it's been broken, I simply do not trust any of that right now. The US definitely wouldn't come to the defence of the Baltics which would be the frontline of any start of Russian aggression towards the EU.
Feel free to read more about literal US troops deployed on the frontline in the Baltics, and in Eastern Europe: https://www.cfr.org/articles/where-are-us-forces-deployed-eu...
> Sorry to say but this is not the reality anymore.
Factually incorrect.
> The US admin is cozying up with many far-right groups in Europe as well, given that China hasn't directly threatened to annex any territory from European countries we can see how between US vs China, China is becoming the more reliable partner. It's a quantifiable measure, they are predictable, it's easier to deal with.
Ok so if the US is cozying up with many far-right groups in Europe as well, that means the US and China are operating the same. Ok that's neutral.
The US has threatened to annex Greenland, which, let's be honest was most likely an extremely poor, stupid, and bombastic negotiating tactic as the island is effectively undefended and if the EU is going to own it they need to increase defense spending there to levels that are satisfactory to the United States.
And while I disagree completely with the Trump admin's approach, getting really angry about that one thing, and then all of sudden pretending that is somehow worse than the Chinese helping Russia physically attack Ukraine is beyond bizarre to me. But maybe that's kind of the point - EU doesn't actually care much about Ukraine.
> How exactly is China threatening the USA?
Are you really not aware of the geopolitical confrontation between China and the United States, or are you being facetious?
> Maybe you should do good deals with Russia if that's how you think, you're displaying exactly the reason why we in Europe don't really feel keen on dealing with the USA anymore.
You're displaying the exact reason why folks in the USA have stopped caring about Europe.
> Feel free to read more about literal US troops deployed on the frontline in the Baltics, and in Eastern Europe
I'm very aware, and again: what's lost is the trust that this means anything right now. Your government is fickle and spineless, it doesn't bode well to rely on it, it has cozied up with Putin through Trump so why should I believe those troops will actually be activated? Why, exactly? Trust is lost, that's a fact.
> Ok so if the US is cozying up with many far-right groups in Europe as well, that means the US and China are operating the same. Ok that's neutral.
I never said that, don't put words in my mouth, just this week it's probably the 3rd or 4th time an American here on HN tries to do that, it's quite tiresome.
I did say that the USA is not better in that term since it's doing the same so your argument is nil. If China is bad for doing that then the USA (which includes you) as it is right now has no moral stand to use that as argument.
> The US has threatened to annex Greenland, which, let's be honest was most likely an extremely poor, stupid, and bombastic negotiating tactic as the island is effectively undefended and if the EU is going to own it they need to increase defense spending there to levels that are satisfactory to the United States.
We don't care if it was a negotiation tactic, the end result is the same: you've threatened us, there's no friendship or alliance that survives that unscathed. It was stupid, don't you think these actions have political implications? Growing dissatisfaction with the USA means electing people who will continue the trend of decoupling, this "tactic" has consequences, and the consequence is to not be so deep into the USA's influence, you've proven you don't care about that.
> And while I disagree completely with the Trump admin's approach, getting really angry about that one thing, and then all of sudden pretending that is somehow worse than the Chinese helping Russia physically attack Ukraine is beyond bizarre to me. But maybe that's kind of the point - EU doesn't actually care much about Ukraine.
The EU has spent more money to supply Ukraine than the USA, Europe has been taking over the vacuum the USA is leaving after electing Trump because the USA does not care a single yota about Ukraine, on the contrary: your administration is led by someone who continuously praise Putin, and is very likely heavily influenced by Putin and the Russian government. Don't come with "no u" onto this.
You need to accept the USA as we knew before is over, there's no coming back from MAGA-adjacent stuff for generations, the seeds have been sown, your society is MAGA, like it or not. We outside the USA need to be prepared for this new world, and detaching from your sick society is one of the required steps.
Again, China is, at the very least, predictable. You aren't, go fix your house if you want that impression to be changed.
I think you misunderstand the feeling in Europe.
> The US would still come to the defense of France, Germany, UK,
Pretty sure many Europeans genuinely doubt it. It's not only Greenland (though that is an actual military threat), it's also that the US government (not only Trump) has been saying repeatedly (many times to EU governments, in front of journalists) that he may not do it. Or he may, depending on how he feels on that day.
In went from "The US may not protect a NATO member anymore" to "Actually we're thinking about invading you". Maybe you see that as "words", but I strongly believe that the Europeans see that as very real threats.
> sprinkle in some hacking, and disinformation campaigns to fuel European far-right groups too.
The US has been documented to spy on EU politicians forever. Also to interfere with other countries (including European countries) for their own interest. And when it comes to disinformation campaigns to fuel European far-right groups... It's not only members of the US government who have openly been doing that, but also oligarchs like Elon Musk.
> The main criticism I have here of the EU is that they seem to think the US should come and help Europe
When the Europeans complain about the US now, it's very far from that. They think that the US should not behave like an enemy. And that's a wake-up call because until recently, they knew that the US was "interfering in their own interest", bullying and abusing their dominant position, but it was accepted "because it's an ally". But suddenly they explicitly tell to Europe that they are not allies. What remains?
> but when it comes to China all of a sudden it's
That's another thing: I don't think that Europeans see China as an ally. But this hasn't changed dramatically in the last year.
When people say they would rather buy Chinese products (and it's not only Europe, look at Canada and probably others), they react to the fact that they feel they have been betrayed by the US. And when they say that, US citizen seem to genuinely not understand because "they never considered that they were friends". Well guess what, the Europeans thought it was a friendship. Of course now they're disappointed.
> I think you misunderstand the feeling in Europe.
No, I understand it. Thanks. I disagree with it - that's different.
> Pretty sure many Europeans genuinely doubt it.
Let's just get to the point: do you want the United States to leave military bases in Europe and withdraw from NATO and other security commitments related to Europe? Because you and others seem to keep "doubting" it, so maybe we should just do what you think we're going to do then.
> The US has been documented to spy on EU politicians forever.
The EU spies on the US too. This is common practice. Don't be naive.
> That's another thing: I don't think that Europeans see China as an ally. But this hasn't changed dramatically in the last year.
Right... of course "China isn't an ally". But the EU is happy to do trade deals with China (which won't last by the way, once the products that were going to the US start going to Europe and grind Germany's manufacturing capabilities into dust while China continues to limit your access to their market) even when they are actively helping Russia invade Ukraine.
Time and time again folks like yourself and others sit here even in these comments and say things like "China isn't doing anything to Europe" and "the US is supporting Russia" and then you act surprised when Americans say fine, maybe we will support Russia when we've sitting here giving tens of billions of dollars in equipment to Ukraine, selling them weapons we also need, providing intelligence and logistical support, including active targeting of Russian assets in Russia, seizing Russian oil tankers funding their war economy, which Europe was too weak to do until the US took the lead, maintaining tends of thousands of soldiers, aircraft, tanks, and more in Europe including in the Baltic states, Romania, &c, and more.
Maybe you and others who feel like you do should be more introspective about how the EU has behaved, and how you yourself sounds to Americans. When I read comments like this, and keep in mind I think the US should have went straight to war against Russia when they invaded, it makes me want to write my Congressman and tell them to stop supporting Ukraine and leave NATO. But maybe that's your goal too. :)
This all honestly sounds sociopathic.
You cannot disagree with the feelings of someone else. Someone is sad, they are sad, period. This is "being a human 101".
"Since you already feel hurt, it makes me want to hurt you, but maybe that's your goal".
You actually scare me. Let's stop this here please.
> But if the EU "decouples" from the US, there's no incentive for the US to not, for example, take over Greenland.
I dunno, I think Denmark and its remaining allies, including at least two nuclear weapons states, might be able to provide some incentive for the US not to take over Greenland.
> But the EU is sitting here telling us it's this huge problem that Russia is invading Ukraine, yet they're happy to increase cooperation and trading with China who is providing support to Russia for their invasion?
No, they aren't happy being backed into that by the open threat of US aggression. They weren't too happy having to ally with the USSR against the Nazis, either, but, you sometimes you have to deal with the overwhelming immediate problem, first.
> Maybe increasing trade will help China stop helping Russia's war against Ukraine
Its not Russia’s aggression in Ukraine that the shift toward China is aimed at.
> we could just look at that activity and say, well, maybe we shouldn't help the EU here and if they really think Ukraine is a problem they should take these other actions instead, whatever they may be.
We aren't helping the EU, we are threatening an EU and NATO state (and another NATO state, and consequently an ally of many EU states) with invasion. That’s literally the source of the shift you are complaining about. Trying to use the response to justify the action it responds to is...mind-boggling mental gymnastics.
> I dunno, I think Denmark and its remaining allies, including at least two nuclear weapons states, might be able to provide some incentive for the US not to take over Greenland.
If there really was just a, damn the alliance we want Greenland approach - and there's not, the EU including its nuclear armed states would not be able to do a single thing about it. Let's not be delusional. There is absolutely no debating this.
> No, they aren't happy being backed into that by the open threat of US aggression. They weren't too happy having to ally with the USSR against the Nazis, either, but, you sometimes you have to deal with the overwhelming immediate problem, first.
To be clear, are you suggesting the United States in general is the "immediate problem" and not Russia's invasion of Ukraine? I just want to make sure I understand your point of view here very clearly before I respond and want to give you that opportunity.
> Its not Russia’s aggression in Ukraine that the shift toward China is aimed at.
Ok, but as long as you acknowledge that China is assisting Russia in the invasion of Ukraine and further trading with China only furthers that war and Russia's aims.
> We aren't helping the EU, we are threatening an EU and NATO state (and another NATO state, and consequently an ally of many EU states) with invasion. That’s literally the source of the shift you are complaining about. Trying to use the response to justify the action it responds to is...mind-boggling mental gymnastics.
The source of the shift didn't start there, nor will it really end there. But we are helping the EU immensely even when we're having a conflict about somewhere else. You can't make the claim that the EU gets to do this with respect to China but the US doesn't get to do it with the EU.
> To be clear, are you suggesting the United States in general is the "immediate problem" and not Russia's invasion of Ukraine?
No, I am suggesting that the United States, not China, poses the more immediate, direct threat to EU states and their treaty allies. Both the China and, under Trump, the US are also contributing to the problem of the Russian war in Ukraine, but that's not the comparison point.
Thanks for the clarification. Yes I unconditionally disagree with that assessment.
> the US are also contributing to the problem of the Russian war in Ukraine
This is factually incorrect.
Are you just swearing off American brands (I'm sure those products aren't made in the USA besides AWS), or is it about swearing off American goods like flying in 737s? Obviously, you haven't sworn off HN, which I believe is American made, but I guess that's a niche edge case.
I don't think you could have paid me to go on a boeing airliner even before recent political events
Ryanair is a hard airline to fly on, I guess, I don't blame you.
OK so you import less American stuff. While still wanting to export the stuff you made to America.
So now you're tied up to Trump even more than before. Because you either traded your goods for US investments, or just pieces of paper that only continue to be worth something insofar as the US doesn't bungle their economic and geopolitical policies. Because those are the primary alternatives to settling the trade by getting goods/services back.
Why wouldn't you want to cash out and actually get stuff back from the US for the stuff you make for them, if you think the US is headed south? It's not like you're exporting to the US as a charity.
after the threats of invasion: as far as I'm concerned the relationship is dead
to hell with the economic consequences
as a brit, I wouldn't be buying German products in 1939 either
To be fair, this is more like 1932.
This makes zero sense.
How does it not make sense? When you export things to other countries you expect something back in return of equal value, unless you're just doing it for charity. On a world stage the US imports more than it exports.
Obviously all the countries not choosing to settle it by balancing the imports with equally valued exports are still not just donating that difference away, so it must be going somewhere.
What did you think that must be? The only option is they must have kept that capital in the US if they didn't export the balance of their trade back out. Kept it in the US because for whatever reason they decided to invest it there rather than get goods/services in immediate exchange or invest in their own country. By increasing the trade deficit you're literally going stronger in on investing in what America is doing.
Doesn't your argument reveal the irrationality of the administrations’ tariff policy?
Yes, countries do not export goods as charity to the US. They get to hodl the Dollar. This huge demand for the Dollar has made it possible to print so many of them and still keep the value, giving the US a big advantage over any other currency.
But who is responsible for the trade deficit anyway? It's the US consumer, of course. No one is forcing them to buy all this stuff.
Now imagine yourself in the shoes of a poor country exporting textiles to the US. What are you to do to make the US administration happy? You can't afford American products, so your only choice is to stop selling to the US? How does that make any sense or help anyone?
mothballed's comment was probably flagged because they used the R slur
The US is acting irrational. It causes a bunch of reactions, one of them being downright fear (because of e.g. a military threat, but not only).
And then you seem surprised that those reactions are not always rational? How does that work?
if only you lot had done the same with Russian natural gas.
How could this article not include a chart? How does trade deficit differ from https://fred.stlouisfed.org/series/BOPGSTB ?
Wow, it's skyrocketing. It looks like it started to take off right after Trump's tariff announcement. Was that in March?
(Markets are not happy right now either, but that's likely for some other reason, and will no doubt rebound suddenly because alwaysgoesup.)
> Markets are not happy right now either
We are in a large futures expiration week. There's always extra volatility around there.
The Trump White House literally cited the trade deficit as a "national emergency" in April 2025 to justify its actions on tariffs.¹
> I, DONALD J. TRUMP, President of the United States of America, find that underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States. That threat has its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system. I hereby declare a national emergency with respect to this threat.
Does not seem they've addressed their self-imposed "national emergency".
¹ https://www.whitehouse.gov/presidential-actions/2025/04/regu...
If I was cynical I would assume that manufacturing emergencies was the whole point.
You don't have to be cynical to recognize someone else being cynical. When your legal system carved out a bunch of loopholes for emergency powers.... Suddenly everything is an emergency.
Pretty common for authoritarians.
Surely if we say we'll quadruple tariffs in two months and then walk it back in a month, the situation will improve?
I suppose at a certain point, there wouldn't be any trade at all, which would mean Trump had finally eliminated the trade deficit.
High chance this report motivates Trump to do something extra heavy handed.
I would guess go 180 on tariffs like he did the last time when the market took a nosedive reacting to his tariffs.
Only if he spots it on his twitter feed.
Like release the Epstein files? Lol
Impossible to foresee. The transition from putting together advanced things from imported goods, into a textile and coal economy, was supposed to go much faster!
The only solution is to swap out leadership of Atlanta FED. That way, we can have more positive reports.
Jan - US trade deficit sinks as tariffs take a bite.
Jan - October Trade Deficit Declines on Higher Exports, Lower Imports
Nov - US trade deficit widens by the most in nearly 34 years in November
Saw that too. It says the October blip was due to a one-time movement of gold. (IDK what that implies economically, just pointing it out).
As long as it makes America great again! /s
Gee, I thought the tariffs were supposed to take care of this. Isn’t that why they were calculated based on the trade deficit? /s
They should do a recalculation with a more SOTA model. It's been a while.
Maybe it takes a generation or so…
Why wouldn't it?
Trade deficit is a good thing. It means foreigners are keeping capital in the US as investment on their trades rather than exporting it out to balance it out.
Another way to frame trade deficit (sometimes) is using the phrase "investment surplus".
Many top economies have trade deficits. China is a unique example that goes against that, although I believe China is trying to have their population spend more rather than save.
while that is true, there is more to it than that. It distorts US finances and debt market. It is helpful to the US, until at some point it will cause major problems, it's just hard to say exactly when.
It means the US received a lot of goods and services without any need to actually make them or make something of equal value.
My understanding is that while politicians generally focus on trade deficits being the result of unfair trade practices or high US labor costs, the majority of economists think that foreigners preference to invest in US financial markets is the main driver.
Generally I'd rather be in a trade surplus; I would want my country to sell more things than it buys. Energy, technology, machinery, services, whatever it is, if I'm selling, it means I have productive capability/advantage over others and thus more independence.
If you have a deficit, you have free stuff. If you have a surplus, you have the ability to produce stuff, but you're throwing away the stuff you produce. The ideal value is probably zero — perfect balance, as all things should be.
"Actually, it's good when a country imports more than it exports."
This claim seems like it warrants at least some qualifying statements. Certainly you'd acknowledge where there are situations in which a trade imbalance is a net negative?