Trade Deficit

[Toddsterpatriot]

Importing and exporting, (i.e. international trade) is not detrimental to a nation's GDP,

The GDP formula shows every dollar of imports reduces GDP by $1.
Are imports always detrimental to domestic production?

ToddsterPatriot, net annual balances of trade affects their nation's GDP; if there's zero net balance then the nation's trade balance had essentially little or no net effect upon their nation's GDP. Trade surpluses are positive, and trade deficits are negative balances of trade.
The actual extents of contributions or reductions to a nations' GDPs due to their nation's global trade are generally more, and never less than the nation's net annual trade balance.

Portions of domestic production that supported production of globally traded goods, but are not reflected within their price valuations, or were affected by the production of globally traded goods, cannot be identified and attributed to global trade.

Respectfully, Supposn

Are imports always detrimental to domestic production?

 

[Supposn]

Are imports always detrimental to domestic production?

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Respectfully, Supposn

 

[Toddsterpatriot]

Are imports always detrimental to domestic production?

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Respectfully, Supposn

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

 

[Supposn]

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, it's actually more nuanced than you describe. Respectfully, Supposn ​

ToddsterPatriot, net annual balances of trade affects their nation's GDP; if there's zero net balance then the nation's trade balance had essentially little or no net effect upon their nation's GDP. Trade surpluses are positive, and trade deficits are negative balances of trade.
The actual extents of contributions or reductions to a nations' GDPs due to their nation's global trade are generally more, and never less than the nation's net annual trade balance.

Portions of domestic production that supported production of globally traded goods, but are not reflected within their price valuations, or were affected by the production of globally traded goods, cannot be identified and attributed to global trade. ...

 

[Toddsterpatriot]

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, it's actually more nuanced than you describe. Respectfully, Supposn ​

ToddsterPatriot, net annual balances of trade affects their nation's GDP; if there's zero net balance then the nation's trade balance had essentially little or no net effect upon their nation's GDP. Trade surpluses are positive, and trade deficits are negative balances of trade.
The actual extents of contributions or reductions to a nations' GDPs due to their nation's global trade are generally more, and never less than the nation's net annual trade balance.

Portions of domestic production that supported production of globally traded goods, but are not reflected within their price valuations, or were affected by the production of globally traded goods, cannot be identified and attributed to global trade. ...

ToddsterPatriot, it's actually more nuanced than you describe

It's really not.

Trade surpluses are positive,

Great. GDP is $1,000,000.
Next year, add $1000 in exports. GDP is $1,001,000.
Year three, add imports of $500. GDP is $1,000,500.

The $500 in imports reduced GDP, even though the net exports were positive.

Every single dollar of imports subtracts from GDP.

 

[otto105]

If a current account deficit is a "always" detrimental to "jobs and payroll" why has this not borne out in America or other countries with current account deficits?

 

[expat_panama]

If a current account deficit is a "always" detrimental to "jobs and payroll" why has this not borne out in America or other countries with current account deficits?

--because it's a lie often repeated by confused or deceitful posters. Reality is that employment soars when the silly "trade deficit" grows---

--just as domestic production soars:

 

[otto105]

If a current account deficit is a "always" detrimental to "jobs and payroll" why has this not borne out in America or other countries with current account deficits?

--because it's a lie often repeated by confused or deceitful posters. Reality is that employment soars when the silly "trade deficit" grows---

--just as domestic production soars:

I do not see any correlation from the data provided.

 

[EdwardBaiamonte]

I never advocated intercity or interstate trade tariffs..

If California wanted a tariff against NY , just like you want a tariff against China, what argument would you use to dissuade them?

 

[expat_panama]

...I do not see any correlation from the data provided.

The way to prove mathematically whether a correlation exists between two data sets is to run what's called a "regression analysis". The result comes out in terms like "weak negative correlation" or "strong positive correlation". The numbers shown plotted should crank out a moderate to strong negative correlation. The idea may have been confused by the fact that a bigger deficit is more negative --therefore (technically) less.

If this gives you a headache then it means you're sane and healthy.

 

[Supposn]

I never advocated intercity or interstate trade tariffs..

If California wanted a tariff against NY , just like you want a tariff against China, what argument would you use to dissuade them?

EdwardBaiamonte, that's a really good question!!
I don't know what's the balance of trade between California and the remainder of the world. If California has such a great global trade surplus, and if California could feasibly succeed from the United States of America, and if the people and their government were willing to do so, there's no valid ECONOMIC reason that should logically dissuade them from doing so.
I suppose your question to be relative to those of us that advocate USA unilaterally adopt the policy described within Wikipedia's “Import Certificates” article?
In that case, anyone believing the USA should begin reducing our sovereignty in favor of the one world should be an advocate USA continue to seek a pure free trade policy.

Adopting the import Certificate policy would be in the best interests of any nation that would otherwise expect to continue experiencing chronic annual trade deficits of goods.
I'm not so altruistic and willing to sacrifice the best interests of USA's wage-earning families for the benefit of the remainder of the world.

If USA's policy should be altruistic, then it would be cheaper for us to practice our charity through contributions to the United Nations and the World Bank. If we did that, the cost would be paid by ALL USA taxpayers, rather than primarily the financial burden of USA employees and their dependents and enterprise's more dependent upon the financial well being of USA's middle-income earners.

Respectfully, Supposn

 

[gallantwarrior]

Weighing in as an observer: there is definitely a trade deficit with China. Anchorage, AK it the THIRD largest cargo through-put airport in the world. That means we pass the third largest amount of cargo through this tiny, little city than Hong Kong or Atlanta. The greatest amount of that cargo comes from China. Aircraft coming from China are usually packed to the gunwales. Aircraft returning to China are often lightly loaded and even fly empty on their return trip (a relatively expensive venture for normal mortals). The recent rumored tariffs have not had an adverse affect on this inequality, as a matter of fact, more air carriers have joined the market since these "damaging" tariffs have been proposed.

 

[Supposn]

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, excerpted from the thread, The costs and benefits of producing or importing:

... The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. ...

... Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

ToddsterPatriot, that's true. But the entire effects of international trade upon their nation's GDP, (including the leveraged factor portion that's not identified and recognized as due to the nation's global trade), generally affect the nation's GDP to the extent of their net balance of trade.

Global trades effects upon GDPs of both trade surplus, or trade deficit nations are to some extent understated. Those effects to some extents exceed their nation's net balances of trade. ...

 

[Toddsterpatriot]

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, excerpted from the thread, The costs and benefits of producing or importing:

... The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. ...

... Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

ToddsterPatriot, that's true. But the entire effects of international trade upon their nation's GDP, (including the leveraged factor portion that's not identified and recognized as due to the nation's global trade), generally affect the nation's GDP to the extent of their net balance of trade.

Global trades effects upon GDPs of both trade surplus, or trade deficit nations are to some extent understated. Those effects to some extents exceed their nation's net balances of trade. ...

Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

Do you feel that imports reduce domestic production?

 

[Supposn]

If a current account deficit is a "always" detrimental to "jobs and payroll" why has this not borne out in America or other countries with current account deficits?

Otto105, Expat_Panama and I accept post #87's statistical facts; but our determinations as to what are the cause or effects are diametrically opposed to each other.

Products are imported to satisfy accomplished sales, or in speculation of what will profitably sell within the importing nation's marketplaces, (i.e. USA's domestic markets' drive our import volumes, rather than the otherwise.
When our economy is doing well, (i.e. when GDP in “real” dollars are increasing, sales volumes within USA's domestic marketplaces are also generally increasing and when our GDP is performing poorly, sales volumes within our domestic marketplaces are similarly behaving poorly.

To believe, as Expat_Panama does believe otherwise, you must also believe that purchasing more products than the nation produces, is a sustainable viable economic policy. Trade deficits indicate the nation has purchased more products than it produced.

Respectfully, Supposn

 

[Supposn]

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, excerpted from the thread, The costs and benefits of producing or importing:

... The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. ...

... Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

ToddsterPatriot, that's true. But the entire effects of international trade upon their nation's GDP, (including the leveraged factor portion that's not identified and recognized as due to the nation's global trade), generally affect the nation's GDP to the extent of their net balance of trade.

Global trades effects upon GDPs of both trade surplus, or trade deficit nations are to some extent understated. Those effects to some extents exceed their nation's net balances of trade. ...

Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

Do you feel that imports reduce domestic production?

ToddsterPatriot, refer to what you chose to quote within this post. Respectfully, Supposn,

 

[otto105]

If a current account deficit is a "always" detrimental to "jobs and payroll" why has this not borne out in America or other countries with current account deficits?

Otto105, Expat_Panama and I accept post #87's statistical facts; but our determinations as to what are the cause or effects are diametrically opposed to each other.

Products are imported to satisfy accomplished sales, or in speculation of what will profitably sell within the importing nation's marketplaces, (i.e. USA's domestic markets' drive our import volumes, rather than the otherwise.
When our economy is doing well, (i.e. when GDP in “real” dollars are increasing, sales volumes within USA's domestic marketplaces are also generally increasing and when our GDP is performing poorly, sales volumes within our domestic marketplaces are similarly behaving poorly.

To believe, as Expat_Panama does believe otherwise, you must also believe that purchasing more products than the nation produces, is a sustainable viable economic policy. Trade deficits indicate the nation has purchased more products than it produced.

Respectfully, Supposn

Maybe in smaller nations much more effected by trade this current account deficit be borne out, but in our economy your supposition has not proved your assertion.


If we buy all of the oil in the Middle East while sitting on our reserves trade is favorable to us.

 

[EdwardBaiamonte]

Adopting the import Certificate policy would be in the best interests of any nation that would otherwise expect to continue experiencing chronic annual trade deficits of goods.

no idea how trade wars are good? Care to tell us?

 

[Toddsterpatriot]

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Every single dollar of imports subtracts from GDP.
Whether there is a surplus or a deficit.
You should plug it into the formula to see for yourself.

ToddsterPatriot, excerpted from the thread, The costs and benefits of producing or importing:

... The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. ...

... Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

ToddsterPatriot, that's true. But the entire effects of international trade upon their nation's GDP, (including the leveraged factor portion that's not identified and recognized as due to the nation's global trade), generally affect the nation's GDP to the extent of their net balance of trade.

Global trades effects upon GDPs of both trade surplus, or trade deficit nations are to some extent understated. Those effects to some extents exceed their nation's net balances of trade. ...

Holding everything else steady, an additional import of $1 reduces GDP by $1. Even if your net exports was positive.

Do you feel that imports reduce domestic production?

ToddsterPatriot, refer to what you chose to quote within this post. Respectfully, Supposn,

ToddsterPatriot, imports are not particularly detrimental to their nation's domestic production, (i.e. their GDP), until they exceed their nation's exports.

Why do you feel imports are not detrimental to domestic production when every dollar of imports clearly
reduces GDP?

 

[Supposn]

Maybe in smaller nations much more effected by trade this current account deficit be borne out, but in our economy your supposition has not proved your assertion.

If we buy all of the oil in the Middle East while sitting on our reserves trade is favorable to us.

Otto105, regardless of individual nations' extents of size or industrial development, an annual trade deficit is net detrimental to its GDP.

I'm among the proponents of the improved trade policy described within Wikipedia's “Import Certificates” policy. There's good reason why that policy would not be applicable to scarce or precious mineral materials integral to globally traded products.

Did you read and fully consider the article?

Respectfully, Supposn,