What is a trade deficit? Well, it all has to do with imports and exports and, well, trade. This week Jacob and Adriene walk you through the basics of imports, exports, and exchange. So, you remember the specialization and trade thing, right? So, that leads to imports and exports. Economically, in the aggregate, this is usually a good thing. Globalization and free trade do tend to increase overall wealth. But not everybody wins.
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Are you guys issuing an amendment to this video, now that Trump made China stop stealing intellectual, and artificially lowering their currency value and the economy has skyrocketed so much not only the market is doing well, but more importantly the GDP has gone over 3.2%
@ 8:32 He just does not even cover the fact that the Chinese have a third option... They BUY OIL.... Because OIL is traded in U.S dollar....
There is part of the problem, because when they get our cash, they can use it to buy product from a different nation.... This is why we have such a deficit. In theory not a bad thing, but once oil is no longer traded for in U.S dollars we might be in trouble...... Because as the deficit proves, China is more interested in using U.S dollars for buying products in other places. Rather than buying American products or Investing in American companies.
Lesson from this Video, "Global FREE TRADE may put you out of work and turn your small community into a ghost town, where skilled jobs include, "Welcome to Walmart!", or "Would you like fries with that?" or "Do you need a date Mr?" but think of the rising wages in the 3rd world, and the exploding profits of corporations who will sell them the products you can no longer afford. WHEN LIBERAL RACE MONGERS GET BUSINESS DEGREES AND RUN THE WORLDS CORPORATIONS. They love fine things, but you should learn to have less.
Its a shame In the Year 2019, I am a 33 year old truck driver that cant afford any good and services. Today's my sons 6th Birthday and he has lived his hole life in Low income Apartments as the only white kid. I don't even have a car, can't afford one.. What good is paying Social Security and income taxes if one excluded from the services the tax supports??
Correction: when US buys an American made television vs an imported foreign made television yes you save $200 on the imported but a US worker will not have a salary of $3000 to spend it in the economy therefore you’re hurting the economy not helping
Could you explain whether or not there is a disadvantage for countries whose currency is not a reserve currency therefore have to have foreign exchange reserves and how trade deficits impact them moreover if they have foret denominated debt
NAFTA was a nightmare. It costed the US over 40 million manufacturing jobs. Maybe quit taking advice from left leaning economists? And those graphics are imported? You do know that doens't increase our GDP? Thanks for outsourcing.
China just needs to dump american treasuries and spend the 2 trillion on thousands of SSBNs. america will return to a trade balance hopefully and China can finally use the decades worth of trade surplus towards self betterment of the Chinese nation.
Basically, trade deficit is not the devil in it self. It is how the trade deficit is created that is the problem.
Manufacturing jobs in the US has decreased over the years is simply because the products it manufactures is not competitive in the market. Using protectionism to protect the competitiveness of the product in the effort to keep the jobs only delays the inevitable. Eventually the whole house of cards would come crashing down and everyone would lose their jobs. A business can not keep running a loss and the government can't keep protecting it if it intends to be agile and competitive.
The problem is that as the sector of economy moved away from manufacturing, the jobs that are left behind to compensate is not tailored to traditional manufacturing trained human capital. Factory workers and miners don't want to lose their jobs and find out that now they have to go to college to get a degree in computer science. Or become a male nurse. Or become a waiter. They can't or don't want to move to the big cities and start new life there. not only do they have to battle with retraining in different skill set, they have to battle with younger workforce for jobs and they have to deal with the social stigma of not adhering to gender role accepted jobs.
trade deficit is not the problem in itself. the problem happens when people are left behind as the economic environment changes, and is too slow to keep up with it.
Comparative advantages only work in a vacuum where each country is exporting and importing the same number. A trade deficit is bad because it means we are importing more "value" then we export and thus capital is leaving the USA and going abroad. We need to have a 0 trade deficit to fully harness comparative advantage. Without a 0 trade deficit, we are prone to outsourcing which is where there is an absolute advantage, not a comparative advantage.
Tariffs aren't about ending trade. Just regulating imported products, materials, and parts. Some imports we may need, but others would be just competing with companies at home too much, once our factories were up and running. I say to the President- if you enact tariffs on those unneeded imports, just make sure that you have factories up and running, making those products, materials, and parts before you raise tariffs on them, since we'll need those imports in the meantime. Except for imports like steel, etc., since we still have some producers, here, that haven't located to overseas production for cheap labor. They're the ones getting screwed by the trade deals. Then, later, we can produce those things here, again, with less foreign competition. As long as future presidents go along with it. I know it would be a risk for businesses to build new factories, unless they can get some assurance that we wouldn't change back to free trade, again. But we need to lower the trade deficit, and this is one way. By limiting imports. We have materials and technology to do it here. And it shouldn't raise prices too much on domestic goods, compared to imports, because there really isn't much difference in prices between the two, now. For one thing, you have to pay much more to ship goods across the world. And many good paying manufacturing jobs would open up again, lowering unemployment. Imagine all the jobs created to produce replacements for all those imports! Either we get to a one-world without borders, or else have regulated trade. Don't combine the two, ('free' trade). Countries who have trade surpluses ought to use their factories for their own internal economies.
How about one world socialism without borders? All businesses paying net incomes to the global collectives' local chapters. Everyone a part owner. One global security force replacing all military. Granted, you'd need to somehow prevent mass migration from third world to first world, mainly because of PRESENT infrastructures. And come to prior agreements between nations and cultures to compromise on one general culture, and ethics, and laws, before bringing down the borders, (good luck!). But once all the worlds' resources were available to share, it wouldn't take too long to upgrade the infrastructures in the poorer regions. And anyone in those regions could conceivably get a job, due to the collective's non-profit m.o. Allow businesses to have some competition- yet still part of the collective- by diversity of prices and products, to encourage innovation and sales.
still doesn't answer the one basic question I had, who decides what the exchange rate is going to be? Demand and supply is all fine but it's not like if I go to exchange dollars for pounds the guy at the counter will go into a deep thought estimating demand for dollars and come up with number there and then. So who decides and dictates that I dollar equals 0.88 pounds?
Free trade is an illusion, because it is Government that determines the law, and we are crossing borders that allow Americans to be taken advantage of. We do have to protect ourselves instead of running child-like that illusions like NAFTA benefits Americans, when it causes industry to leave America and then we start supporting the foreign nations who seek that advantage as foreign governments and foreign law: It is not our American job to pay for the world. Part of the problem is the number of governments that nationalize or is a direct business partner in business practices, and this is not just about the self-interested nature of businessmen, where it is the self-interested nature of governments and their agents that are different socialists and kingdom driven beasts (a horse of a different color). The best we can expect is reciprocal trade agreements, but we cannot just turn off the borders, because that means lawlessness and being taken advantage of (borders literally means law, because it is a claim of where the law is). Fences make the best neighbors, and that is what law does, so that we are not lost to the barbarian hoards, pirates, bandits, and thieves that rule the world. We do see people claiming the total freedom of the motto, "don't fence me in," but this total freedom is an illusion, because it takes Government to secure freedom, because we never stop reporting to someone. We do not see our world-wide bill of rights, and instead see kingdom building and materialism with the powers that are claiming total freedom for themselves as ruling lords, and we also see the chilling effect on the law that criminalize the everyman into absolute obedience and silence into the fear of being special and capable that makes everyman noticed and targeted.
The United States of America once had the largest textiles industry, and now we import clothing. It has to do with slave labor, with nations like China willing to push people into substandard living conditions to meet their market demands, because on the industrial scale America should be able to serve themselves better.
Thanks. You know what? The world economy is a stretch of complicated matter in a complex web where lives of people are caught. Why can't humanity go back to simple ways of living? It reminds me of this: "The world is too much with us, getting & spending we lay waste our energy" (by Henry W. Longfellow) In other words, too much materialism. SIGH
After watching this video, it appears United States economy is stable because of international trade. United States imports goods from Canada than China yet China is blamed for trade imbalance??? China being an emerging market will continue to pose a great challenge to the world market creating a healthy competitive trade.
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