… just the high labor cost, regulations red tape, gaping lack of qualified workers, especially young ones, almost total loss of the past work ethics… otherwise it is all peachy and profitable.

OK…confusing. Am wanting to do an update on my ‘Trump Tally‘ list, and am not sure where to put this “reciprocal tariffs” move now. Should this Trump move go under the Strong or Weak category?

(For example, they could be trading for things with each other in terms of dollars, and in fact they do, oil is traded in dollars. Same would be true if we were using gold for money, they’d be using “our” gold to trade with each other.)

Another one would be what’s “real” goods and services vs evil “financialization”. For a lot of people manufacturing and agriculture are “real” sources of wealth, non-finance services are sometimes acceptable but usually treated as somehow inferior and not anything a self-respecting country should pride itself on doing, and insurance, banking, and finance are just “financialization”, a waste of effort that could be used for agriculture and manufacturing. (Brian E is big on farming and manufactures but not sure where he is on the others.)

So if you have the appetite to chase down rabbit holes, arguing all the while if it’s a real rabbit hole or actually a crucial point, try arguing free trade online. Not the only topic where this happens but something about it just lends itself to this and sometimes I have the energy for that and sometimes I don’t.

Like I said, not picking on Brian E, who’s a decent dude and not easily provoked into nastiness , trolling, or snark. I disagree with him even on the things I agree with him, but I’m glad he’s here.

I assume you’re saying this because if I buy a product manufactured in, say, South Korea my dollars go there, and thus the wealth is over there now? This is a fundamental misunderstanding of trade. First of all, I have gotten wealth myself in the form of the product that I bought. But, you might say, the money, the dollars are over there, but in fact they’re not. They are coming right back here. How can I say that with such confidence? Because they’re is only one use for a U.S. dollar – to buy U.S. goods or services. It has to come back this way eventually. I will grant you that the foreigner who has gotten ahold of those dollars may use them to buy shares in say, Microsoft, or a treasury bond, and you may not consider those “goods”, but that is what Niketas Choniates is getting at when he refers to, selective and incomplete accounting of benefits and costs.

The very term “trade deficit” only has meaning if one counts certain goods and services, but not others. In the end, there is no deficit.

No, they understand it, and they reject it, because it’s based on selective and incomplete accounting of benefits and costs, and confusion about wealth and the flow of money.

But I’m not sure what else there is to say that hasn’t been said over the hundreds of years people have argued about this.

That I disagree with you doesn’t mean I don’t understand you. That I don’t always choose to argue with you doesn’t mean I have nothing I can say for my position, or that I’ve never heard anything that you say for yours.

For years I’ve been sounding the alarm that a balance of trade deficit is just offshoring the countries wealth.

‘Free traders’ don’t seem to understand the concept.

In the Puget Sound area, we used to see a lot of Canadians who came down here to buy the same items that cost at least 15% more in BC. There was a limit of $300 or so per day that they could take back into Canada. Apparently, they could save quite a bit that way.

That traffic has decreased in the last three years because the Canadian dollar is down to 70cents per U.S. dollar, and our products actually cost them more now.

The Canadian government puts tariffs on our exports to them to raise the price to the Canadian level. Same with most European countries. It’s a financial game that countries have played since international trade began.

Free trade seems unobtainable, but reciprocal tariff trade might work. Most people can see that it’s fair. Many of those we trade with feel we are so rich we should accept getting the short end of trade deals. Trump obviously disagrees. We’ll see if those countries that have big trade surpluses with us will be willing to accept reciprocal tariffs. If not, we could be in for a rough patch.