China Pledges US Buying Spree To Reduce Trade Surplus With US To Zero By 2024

Math Doesn't Work

 

Even though the math doesn't work, Trump will proclaim the greatest trade deal in history.

Economist Brad Setser had a series Tweets discussing the purported deal. Here is the first of 13 Tweets.

 

Tweet 13 Discusses Phones

Assume for a second that happened. Here's the result.

The US deficit with Vietnam or some other country would rise.

Boosting U.S. Exports to China by $200 Billion Is a Tricky Task

​Also consider Boosting U.S. Exports to China by $200 Billion Is a Tricky Task

Dear Xi Jinping, Could we interest you in 500 million metric tons of soybeans? How about five Ford-class aircraft carriers and 465 F/A-18 fighter jets? Forty trillion cubic feet of liquefied natural gas? Around 2.8 billion barrels of crude oil? Two and a half million Tesla Model X SUVs?

We’re just trying to make the math work here.

“I don’t see any plausible way that you could reduce the bilateral deficit by $200 billion in two to three years,” said Brad W. Setser, a senior fellow for international economics at the Council on Foreign Relations. “You work through individual sectors, and it’s hard to get close to even $100 billion over that time frame, let alone $200 billion.”

Mr. Setser estimates that a realistic hope for a near-term increase in soybean exports to China is about $5 billion, which would likely come at the expense of other Chinese trading partners, such as Brazil.

Mr. Setser cautioned, Mr. Trump might not like the resulting math. In nominal dollars, he said, American imports from China are growing by about 10 percent a year. If that rate keeps up, it would wipe out some or all of any trade-balance gains that administration officials secure in their negotiations with China.

View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.