from: http://www.nytimes.com/2017/04/05/business/trump-xi-trade-deficit-china.html PETER S. GOODMAN APRIL 5, 2017 In the world according to President Trump, trade deficits are among the clearest indication that Americans have become habitual chumps in the global marketplace. The United States sells fewer goods and services than it buys from the rest of the planet, and this is supposedly evidence that Americans are getting rolled... ...Trump’s portrayal of trade deficits entails crucial departures from economic reality. In his accounting, international trade is a zero-sum affair, as if every country were jockeying for a share of forever limited amounts of business... ...Trade is not zero-sum. Expanded trade has historically tended to support economic growth, which generates more spoils to be divvied up for all. American factories have increased production over the years... ...China’s trade surplus with the United States, which reached $347 billion last year... ...China remains a relatively low-income country, home to hundreds of millions of people who cannot afford the more sophisticated fruits of the American economy. Though wages have risen in recent years, China’s fundamental advantage still involves making goods cheaply. The Trump administration faces the problem that China’s high trade barriers are allowed by the World Trade Organization, because China entered the group as a developing country and insists it still is one... ...Liberalized trade has proved punishing for lower-skilled factory laborers... ...trade has proved a boon to bankers, executives and multinational corporations that harness low-wage labor in distant lands... ...American consumers have grown accustomed to low prices for clothing, shoes and other goods. None of this action gets captured in narrow obsessions over trade deficits... ... “We have U.S. companies that are hugely profiting by having access to low-cost labor in China. Portraying that China won and we lost is 180 degrees wrong. Factory laborers are the losers.”
