Claman Keith Fitz-Gerald and David Kudla countdown in the prices.
President Donald Trump spent his first weeks at the office deploying his commercial program, which has so far focused on increasing prices. Part of this strategy is Trump’s conviction that prices will help reduce trade deficits.
After his initial announcement of 25% prices on Mexico and Canada, Trump said that countries “had to balance their trade” with the United States so that he is considering not implementing these rates, which are currently Delayed until at least March after the two countries announced border security measures.
“We have deficits with almost all countries – not all countries, but almost – and we will change it,” added the president on the broader trade deficit in the United States. Trump has also announced higher prices on products imported from China and plans to impose reciprocal prices on foreign business partners after an examination which should conclude by April 1.
In 2024, the American trade deficit In goods, increased by 14% in 2024 to reach a record of $ 1.2 billion, while the trade surplus of American services increased by 5.4% to reach $ 293 billion – which led to a net trade deficit for goods and services of $ 918 billion last year, up $ 133 billion compared to the most the previous year. With the growing trade deficit and the president aimed at reducing it, Fox Business has been maintained with expert economists to know if commercial deficits are a problem that prices can solve.
The American trade deficit strikes a record that will be a Trump target
President Donald Trump challenged American trade deficits with other countries and praised prices as a way to refine them. (Chip Somodevilla / Getty Images / Getty Images)
Ryan Young, main economist of Enterprise Institute competitiveness, told Fox Business that people who buy goods and services abroad are because they “appreciate what they get more than the money they abandon” .
He added that trade sales “say nothing about the economic health of a country, good or bad, it simply means that many people make beneficial decisions”, while noting that the United States has managed trade deficits for more than 50 years.
“The United States has managed a trade deficit every year since the 1970s, but the standard of living is better for almost all measures, whether income, unemployment rateLife expectancy, percentage of low -income households with air conditioning, internet and other goods, or almost any other measure. If the trade deficit was harmful, a large part of what we see all around us every day should not exist, “said Young.” Trump gives many reasons at his prices. Trade deficits should not be part of it. “”
Trump signs a reciprocal price plan: economists weigh on how it could work
Scott Lincicome, vice-president of the general economy at the Cato Institute, told Fox Business that Trump’s first mandate China prices Can serve as an example of the impact of bilateral trade between the two countries as well as the global trade deficit.
“Trump imposed a ton of steel and aluminum and Chinese products prices – and the American -Chinese bilateral trade balance has shrunk. But the global trade deficit has not changed because a Share of GDP was fundamentally stable, “Lincicome said, noting that business deficits with countries like Vietnam developed as China’s trade deficit decreased.
President Trump praised the role of the US dollar as Reserve Keepings of the World And recently threatened prices on the countries of the BRICS Alliance if they try to end this role. However, the status of the dollar also contributes to the trade deficit.
President Donald Trump has signed several decrees related to trade and prices since returning to the White House. (Images Andrew Harnik / Getty / Getty Images)
“The United States can manage major trade deficits for somewhat unique reason, and this is the role of the dollar as a global reserve currency,” said Lincicome. “Because the dollar is in demand abroad, this actually increases the value of the dollar … Generally, a stronger dollar increases imports and decreases exports.
“So, in this case, the trade deficit itself is the symptom of a good thing for the American economy and something Trump loves,” he added.
Steven Kamin, a principal researcher from the American Enterprise Institute who specializes in macroeconomics and international finances, told Fox Business that the deployment of prices as a means of bringing back Manufacturing jobs The large number of jobs is unlikely to be relocated.
“A large part of the destruction of manufacturing jobs has been caused by a technological change, not by competition in importation,” said Kamin. “A large part of this hemorrhage of manufacturing jobs in countries at very low cost like China, like Mexico, was a little inevitable. We never went to keep these jobs, and more importantly, the imposing price for this stage will bring some, but not many jobs.
The United States has been running commercial deficits since the 1970s. ((Photo of Qian Weizhong / VCG via Getty Images) / Getty Images)
Kamin also noted that the federal government budget deficit plays a role in the contribution to the American trade deficit.
“If you look at the United States private sector – households and businesses – they actually gain more than they spend consumption and investment. So, fundamentally, overall, our private sector manages a small surplus. It is the government that manages a big deficit, “said Kamin.” So if you really wanted to reduce the trade deficit, you would reduce the budget deficit. “”
Get Fox Affairs on the move by clicking here
“The trade deficit does not matter, the budget deficit is important. public debt“Kamin said.” As this debt increases, it competes with the private sector to borrow funds and increases interest rates. And if this debt increases enough, interest rates could increase the sky – and this is something from a distance in the future – could lead to a financial crisis. “”
