Trump pledge undermined as United States trade deficit widens

Senior White House economic adviser Larry Kudlow speaks during a briefing at the White House in Washington

Senior White House economic adviser Larry Kudlow speaks during a briefing at the White House in Washington

By the same logic, it's no surprise that America's trade deficit shrunk dramatically during the recession that followed the 2008 economic crisis. Their research also revealed that workers in many Republican-leaning counties suffered the most economically from Trump's trade disputes.

But "early details indicate it would do little to substantively change the way China has long done business and would not force Beijing to curtail cybertheft or the subsidies that the administration complains create an uneven playing field for American companies". Equally ironic is the fact that Wednesday's data shows America's economy to be in strong shape.

The main long-term driver of persistent trade deficits since 1975 has been the gap between the US's low savings rate and its attractiveness as an investment destination, fueled partly by the dollar's role as the world's reserve currency.

The US is now locked in a trade battle with China over what it claims are unfair trade practices, resulting in tit-for-tat tariff increases on each others' goods.

"We will continue to call on China to end these counterproductive policies, free all those arbitrarily detained, and cease efforts to coerce members of its Muslim minority groups residing overseas to return to China to face an uncertain fate", she said. In a March 2 speech to a conservative political group, he called them "the greatest negotiating tool in the history of our country" and credited them with bringing trade partners such as China to the bargaining table.

Trump is facing pressure from both parties in Congress, with Senate Democratic Leader Chuck Schumer in a floor speech on Tuesday cautioning the president not to settle for a weak deal with China.

Ethanol, now hit with a 70 percent tariff at the Chinese border. "When things are booming we consume more imports".

Trump's team is asking China to give up its right to retaliate should the United States take action unilaterally.

But a pair of new studies concludes that he is wrong.

"I've supported the view that we should try to focus the [current] negotiations on opening up more Chinese markets", Dollar said.

A second study by four economists from the University of California, Los Angeles; Yale University, the University of California, Berkeley; and Columbia University reached the same conclusion.

However, Mr Trump may choose to lift tariffs on European cars and parts after the US Commerce Department produced a report examining whether the imports threaten national security.

Still, the biggest takeaway from the new trade data is not that the tariffs predictably failed to do what Trump thought they would; it's that the US economy is powered by the individual decisions of millions of people and businesses, and that entity is far too complex and powerful to be controlled by the White House.

The study also found sizable costs relative to any expected benefits. We had to dust them off. But that doesn't mean the trade war ends.

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