Claiman countdown panelists unpack the pressure of Keith Fitz-Gold and David Kudla tariffs.
chairman Donald Trump The first few weeks have been spent rolling out their business agenda in the office, which thus focuses on the growing tariff so far. A part of that strategy Trump believes that tariffs will help reduce trade deficit.
After its initial announcement of 25% tariffs on Mexico and Canada, Trump said that countries have to “balance their business” to consider not implementing those tariffs “, which is currently the announcement of both countries. There are at least delay till March. Border security measures.
The President said about America’s broad trade deficit, “We have a shortage of almost every country – not every country, but almost – and we are going to change it.” Trump has also announced a high tariff on imported products from China and is planning to impose mutual tariffs on foreign trading partners after expecting ending by 1 April.
In 2024, US trade deficit The goods increased by 14% in 2024, reaching a record of $ 1.2 trillion, while the US trade surplus in services increased by 5.4% to $ 293 billion – last year 918 billion dollars goods and net trade deficit for services Leading for, exceeding $ 133 billion to more than $ 133 billion. Last year. With the increase in trade deficit and the President aims to narrow it, Fox Business spoke with expert economists whether the business deficit is a problem that the tariffs can fix.
American trade deficit is a hit record that will be a trump target
President Donald Trump has raised the issue with US trade deficit with other countries and postponed tariffs as a way to narrow them. (Chip Somodeville / Getty Image / Getty Image)
Ryan Young, senior economist at the Competitive Enterprise Institute, told Fox Business that people who buy goods and services from abroad are “because they” get more value than the money they pay. ,
He said that trade balance “does not say anything about the economic health of a country, good or bad, it means that many people are making beneficial decisions,” given that America for more than 50 years Business has run losses.
“America has run a trade deficit every year since the 1970s, yet the standard of living is better than almost every measure, even if it is income, Unemployment rateLife expectancy, air-conditioning, percentage of low-income houses with internet and other items, or almost any other measures. If the trade deficit was harmful, then everything we see around us should not be present every day, “Young said.” Trump gave a lot of reasons for his tariff. Lack of business should not be one of them. ,
Trump Signs mutual tariff scheme: Economists weigh on how it can work
VP Scott Linsicom, VP of General Economics at the Cato Institute, told Fox Business that Trump’s first term Tariff on china Can work as an example of how they affect bilateral trade between the two countries as well as the overall trade deficit.
“Trump applied a ton tariff on steel and aluminum and on Chinese goods-and the US-China bilateral trade balance decreased slightly. But overall the US trade deficit did not change, it was basically flat as a part of GDP. , “Lincicom said, given that trade deficiency declined the lack of trade with countries like Vietnam.
President Trump has postponed the role of US dollar World reserved currency And recently threatened tariffs on countries in BRICS Alliance if they try to end that role. However, the dollar condition also contributes to the trade deficit.
President Donald Trump has signed several executive orders related to trade and tariffs since returning to the White House. (Andrew Harnik / Getty Image / Getty Images)
Amidst the concerns of inflation, tariffs may have factors in the rate-cut schemes, experts say
“The United States can run a large trade deficit for somewhat unique reasons, and it is the role of the dollar as the world’s reserved currency,” Linsicom said. “Because the dollar is in demand abroad, which actually increases the value of the dollar … generally, a strong dollar increases imports and reduces exports.
“So in that case, the business deficit is the symptom of a good thing for the American economy and Trump likes something,” he said.
Steven Kamin, a senior partner of the American Enterprise Institute, who specializes in macroeconomics and international finance, told Fox Business that deploying tariffs as a means to bring back the tariff Manufacturing jobs Important number of jobs are unlikely to be resumed.
“A lot of destruction of manufacturing jobs was caused by technical changes, not by import competition,” Kamin said. “In very low -cost countries like China, a very low -cost countries like Mexico were very indispensable for manufacturing jobs. We were never going to keep those jobs, and even more importantly, the tariff at this point Applying will not bring anything, but not a lot of jobs. “
The US has run trade deficit since the 1970s. ((Via Getty images by Qian Weizhong / VCG) / Getty Picture)
Kamin also said that the fiscal of the federal government budget deficit The American plays a role in contributing to trade deficit.
“If you look at the United States private sector – homes and businesses – they really earn more than what they spend Consumption and investmentSo basically, overall, our private sector is running a small surplus. This is the government that is running a big loss, “Kamin said.” So if you were serious about reducing trade deficit, you will reduce fiscal deficit. ,
Get Fox Business when you click here
“Trade deficit does not matter, fiscal deficit matures. The reason is that the fiscal deficit is more than the deficit. Government loan“Kamin said.” As the loan increases, it competes with the private sector to borrow funds and increases interest rates. And if that loan becomes quite large, the interest rates can go into the high sky – and it is far away in the future – can create a financial crisis. ,
