Trump is losing the trade war with China: the US trade deficit increased 9.6% from the previous month
Hey monkeys,
Despite the imposition of tariffs and counter-tariffs this past month, President Trump's trade war hasn't seemed to lower the American appetite for foreign goods. Meanwhile, the US trade deficit has increased:
the US trade deficit increased to $50.1 billion, a 9.6% increase from the previous month, according to the US Census Bureau. The increase came on the back of a 0.9% increase in imports to a record $261.2 billion, as US domestic demand remains strong. Exports, on the other hand, slipped 1%. For the year, the trade deficit increased to $338 billion, compared to $316 billion in the first seven months of 2017.
The goods trade deficit with both China and the EU hit record highs in the month of July:
The goods trade deficit with China increased to $36.8 billion, as imports jumped 5.6% and exports tumbled 7.7%. Similarly, the deficit with the EU hit $17.59 billion, as imports ticked up 2.5% and exports collapsed 15.7%.
Most economists generally agree that a trade deficit means a strong economy and strong dollar, but this ever-increasing gap could impact GDP in Q3.
The data show that while the tariffs may be having some marginal effect on exports, the surge in imports is mostly due to the internal strength of the US economy. The US consumer is in a healthy financial spot, especially compared to many other countries, and the strong US dollar makes exports cheaper...Ian Shepherdson, the chief economists at Pantheon Macroeconomics, said that given the variety of factors at work, the second quarter's decline in the trade deficit will most likely be erased in the current quarter.
China is set up for the long game. Moreso, China as a society plays the long game; they're far more comfortable being uncomfortable than America and Americans. President Xi Jinping is also President for life, much longer than President Trump's time in office even if he gets re-elected.
Personally, I don't see how these tariffs leading to concessions would result in a net benefit. What actual benefit do we get out of this besides hurting China at the expense of consumers, the US, and market? Are the tariffs really going to "bring back American steel jobs"; even then, the jobs created in steel won't outweigh those lost in industries like automobile or farming.
Thoughts on this new report? What do you believe will happen to the economy if we continue with the trade war?
Business Insider - Trump is losing the trade war with China and the EU
Tariffs are bad when there is no end goal. The Chinese market is one sided and not favorable to anyone but China. There is only "free" trade on our end, not theirs.
We need a more favorable environment with China and it seems the only way to get this is with the bully stick aka tariffs.
For too long we've allowed corporate greed to gut this country. Time to fight back.
Take a look at the Chinese stock market compared to ours. We are winning. Once Canada folds, we will have effectively renegotiated, to a more favorable US position, all the other outstanding battles and can squarely focus on China.
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