I kinda understand why the tarrif issue and trade balance is important
On the other hand I don't understand
I doubt very much if the trade deficit is changed, it will ever lead to a balanced budget
Maybe a balanced budget is not the goal
I dunno, but if successful what happens to all the trade deficit money that is supposed to go poof
I might be wrong but the only way I see it possible is if goods produced in the USA lead to a lot higher tax revenue, and that is a lot of tax revenue to have a balanced budget, let alone pay down debt, but like I said, maybe that is not the end game
I give that a very slim chance of happening, as I fail to see the end game
Lets go to one logical conclusion, of which there are many
Politicians just seem to spend money they don't have and will continue IMO
I think the bigger worry than trade deficits is unfunded obligations coming due as the population ages
We really need that robotic age to come sooner than later to produce enough to support the baby boomer retirement demands and those folks vote, in higher %.
The baby boomers [of which I would guess an ever increasing larger numbers of folks on this forum, will join] will soon become a very huge special interest group
Thus my larger concern is for unfunded liabilities, which I don't see the connection with tarriffs as solving a huge problem, as time goes by
That said, we all know the trade deficit is financed by printing money out of thin air
If you can print money out of thin air and in all honesty, you in the USA will likely be able to continue for a long, long time
So why worry, when you can print the money out of thin air to buy from the entire world what ever your country wants or needs
The only connection I see is shifting the demand for fiat printed from thin air from a trade deficit to printing money for unfunded liabilities
Now if that is the goal, I can see the merit
But, I have not heard anything said about this train of thought
All I hear is Trump saying the world is taking advantage of the USA
What do you think the USA did when they set up the petro dollar with ME oil
That and other stuff around the world sounds to me like the USA taking advantage of others
So Trump just forgets all the things that happened in the past, including burning down the white house, a 270% tariff on milk[which truth be known, the americian dairy system system has failed, wilst our system has not cost our gov't one cent]
Which system would a person think is the better one???
So we go on a tit for tat tariff war and the world heads for a recession if not worse
Not saying it is right, but I am saying there are numerous ways to address the problem with out a bull in the china shop approach and recession or worse looming for all of us
So lets regroup and consider
We have a trade war that will not help any person in the whole world pocket book
Many people think it will be short term pain for long term gain
If you have any idea about how china thinks, short term pain will not happen
Int rates that are supposed to be coming for some time
What will that do to millions of people
China who can trade with a large part of the world with the silk road
China offering farmers in china subsidies of $190-$380/acre to grow soybeans
China buying soybeans from anybody except the USA
Soybeans and all grains by default going lower in price
China buys cheap soybeans, even paying SA a premium price, beans are still cheap
Lower prices will continue as long as china wants
China can afford to hurt USA prroducers big time and for a long time
Their willingness to subsidize beans, even though not enough show their plan for long term low USA prices
It cost money to ship beans to razil for re-sale to china
That shipping cost comes from lower producer prices
Toldeo could load USA beans to Canadian ports and re-load to ocean boats to china
We won't receive higher farm gate prices in Canada but the people who source and sell will profit
a combination of less revenue and higher consumer prices, will cause a recession
A world depression which is perhaps a smaller risk but is thought to be possible
World trade shifting away from the USA and leaving the USA with very few trading partners
Rare earth minerals which could become extremely difficult for the USA to access at any price
So there you have it
Just a few tthings that could happen but the bigger risk is the unintended consequences
That part that nobody know IMHO is the biggest risk of all
Sort of like cutting off your nose to spite your face
But:
Maybe this had to happen and dam the torpedos
I dunno
Sorry for the long post but things are complicated when you think about it
You may think differently and you may be correct