So…Tired…of…Winning (Trade Deficit Edition)

I’m using Mr. Trump’s definition. Trade deficit overall (NIPA definition) and bilateral with China both increasing.

Note that not much progress is apparent even if normalizing by GDP.


Figure 2: US net exports (blue), and US-China goods trade balance (red), both as a share of GDP. Net exports NIPA definition, SAAR. US-China is difference of monthly series seaonally adjusted using X-13. NBER defined recession dates shaded gray. Trump administration shaded orange. Source: BEA, 2018Q3 2nd (preliminary) release.

What about Mr. Trump’s favorite — even if irrelevant — measure, that is the goods trade balance. That too is deteriorating.


Figure 3: US goods net exports (blue), centered 3-quarter moving average (purple), both as a share of GDP. Goods net exports NIPA definition, SAAR. Trump administration shaded orange. Source: BEA, 2018Q3 2nd (preliminary) release.

11 thoughts on “So…Tired…of…Winning (Trade Deficit Edition)

  1. Moses Herzog

    This latest news is shocking. When did businesses start moving jobs to where labor, parts, intellectual capital, and inputs are the cheapest?? Hmmmm, what a “revelation” in free markets and capitalism, that’s a completely “new one”. To bad John Maynard Keynes and Milton Friedman never lived to see that!!!! Never mind the great Jewish economist David Ricardo ever seeing such wild ideas as capital movement. What simple men they were compared to donald “The Great Inheritor” trump.

    I thought MAGA was a magical thing?? Wasn’t MAGA supposed to pull rainbows, butterflies, and hostess cupcakes out of their ass?? Isn’t MAGA very similar to the Hogwarts School of Wizardry in Harry Potter??? I feel so confused now. Well, let’s see what Larry Kudlow says:
    https://www.youtube.com/watch?v=1cHwGl1AdwU

    Well let’s see what one of the boy geniuses at the American Enterprise Institute says. AEI enjoys licking clean Republican politicians’ and Republican presidents’ lower body orifices, so let’s see what they say:
    https://www.youtube.com/watch?v=dGwrSrUf_Ek

    Hmmm, maybe trump will have to drop another bomb so soybean farmers and GM workers can feel happy about working at McDonalds now??
    https://en.wikipedia.org/wiki/GBU-43/B_MOAB

    Well, we have some commenters here, who have extremely poor reading comprehension reading a 3 page WSJ article about Huawei, who think cell phone towers and 5G networks are the same thing as smart phones—so those 2 commenters are going to be shocked to find out that donald “Orange Excrement” trump could care less about Apple.
    https://www.youtube.com/watch?v=ePUTlDGCMfQ

    Let’s see if the two commenters with horrid reading comprehension can manage comprehending Youtube videos here, shall we?? Maybe there’s a function on Youtube where we can slow the video down so they speak slowly??
    http://econbrowser.com/archives/2018/11/this-doesnt-look-like-a-china-getting-ready-to-capitulate-to-trump#comment-219092
    responding to——–>> https://www.wsj.com/articles/washington-asks-allies-to-drop-huawei-1542965105?mod=trending_now_1

    Ok, dumdums, once again, the USA government negotiations with those countries related to Huawei, had nothing to do with smartphones and everything to do with telecommunications equipment and infrastructure. Thanks for playing “Can a 5th Grader Comprehend a 3-page WSJ article???”. Always good times.

    Reply
  2. Not Trampis

    Wow,
    fancy a country with a structural budget deficit of 6% of GDP and interest rates at perhaps normal having a trade deficit. Imagine consumers and companies buying up imports.

    Reply
  3. Moses Herzog

    Say what you want about donald “Orange Excrement” trump’s trade policies, the Evangelicals that voted for him say he is a very righteous and “family values” kinda guy:
    https://www.dailymail.co.uk/news/article-6439339/Trump-Cabinet-member-Alex-Acosta-billionaire-serial-sex-abuser-Jeffrey-Epstein-sweetheart-deal.html

    And that’s not even mentioning the full-fledged support donald “The Great Inheritor” trump has from lawyer “Super PedoDersh”. Endorsements like that don’t come easy……

    Reply
  4. Paul Mathis

    The U.S. consumer is the engine that is pulling the world economy and fortunately consumers are spending their money. The trade deficit is getting worse because Trump has decimated agricultural exports and many other export products with his nonsensical trade war that we are obviously losing.

    OTOH, Trump’s budget deficit is fueling economic growth and offsetting the trade deficit demand drain so we should have +3% GDP growth this year for the first time since 2005. Meanwhile Core PCE will be under 2% again this year as it has been for 9 of the past 10 years. Happy New Year Everyone! (less than 2 years of Trump to go)

    Reply
  5. joseph

    Oh, my. Today we have Trump’s personal lawyer and bag man Michael Cohen swear in court that he lied to to Congress out of loyalty to the President when he said that Trump had no financial dealings with the Russians.

    And Trump’s hilariously cliched response was, “I didn’t do it ….. but if I did, there was nothing wrong with it.”

    Well, maybe not so hilarious, since it means we have a lying psychopath in the White House.

    Reply
    1. pgl

      Even funnier was Rudy G’s reaction. Rudy rushes out and says in Trump’s answer to the Mueller questions that Trump said the same thing that Cohen said. So Trump told the truth according to Rudy. But then Rudy turns out and says Cohen lied. WTF? Has The Onion taken over Rudy’s brain?

      Reply
  6. pgl

    Liberty Street Economics looks at the current account/GDP ratio from 2010 to 2018 from the good old fashion metric of comparing national (gross) savings to investment (gross):

    https://libertystreeteconomics.newyorkfed.org/2018/11/is-the-united-states-relying-on-foreign-investors-to-fund-its-larger-budget-deficit.html

    Their first paragraph:

    “The federal tax cut and the increase in federal spending at the beginning of 2018 substantially increased the government deficit, requiring a jump in the amount of Treasury securities needed to fund the gap. One question is whether the government will have to rely on foreign investors to buy these securities. Data for the first half of 2018 are available and, so far, the country has not had to increase the pace of borrowing from abroad. The current account balance, which measures how much the United States borrows from the rest of the world, has been essentially unchanged. Instead, the tax cut has boosted private saving, allowing the United States to finance the higher federal government deficit without increasing the amount borrowed from foreign investors.”

    So the new Kudlow spin is going to be that the rise in the government deficit was designed to get rich people to save their tax cuts! Good to know! A guess those fans of Barro-Ricardo are having a nice chuckle.

    Reply
  7. Moses Herzog

    Off-topic People say they get tired of the same “formulaic” films from Hollywood. Then when films that are in fact different are at the theater, no one pays tickets to watch them. Well, you’ll have to look for this on DVD or streaming services (or “pirate” methods?? wink wink), but if you like quirky films, if you like the path less tread, and are anti-war, then I highly recommend you watch this film, whatever your preferred medium of watching it is:
    https://www.rottentomatoes.com/m/micmacs/

    Reply

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