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Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free stock market analysis and real-time data to help you select the best investment portfolio and achieve stable returns. Speaking atMar-a-Lago last week, Trump didn’t specify what constituted the $200 billion, but he used the figure in the context of how the US “subsidized” Canada and also had a “massive” trade deficit for items —such as cars and lumber— that he said the US does not need.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Expert predictions with real-time global stock and futures data to help you easily capture market movements. The lion’s share of the $200 billion was attributed to US defense spending of which Canada directly benefits, and the remainder is from the trade deficit, a Trump-Vance transition official told 【 - Free Access to Investment Community 】.
In 2023, the US had a trade deficit of $67.9 billion dollars with Canada,Commerce Department data shows.
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Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Precise stock selection to help you successfully plan investment strategies for stable returns. Related articleCanada is preparing to strike back hard with retaliatory tariffs if Trump starts a trade war
However, some economists caution that exaggerating or classifying trade deficits as losses or subsidies isn’t a fair representation of what has become a crucial mechanism for the US economy.
“The President-elect sees the world as a zero-sum game: Anything that’s not made here or bought elsewhere is considered a loss, which simply isn’t the case,” Joe Brusuelas, chief economist at RSM US, told 【 - Free Access to Investment Community 】.
Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics, put it another way.
In simple terms,a trade deficit resultsfrom when the value of a country’s imports exceeds the overall value of exports.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free real-time market data to help you quickly recover and avoid losses. And for much of the past 50 years,the US has had a trade deficit, driven by goods (America runs a growing surplus on services).
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Real-time global stock, futures, and forex data to help you master market dynamics. That trade gap widened significantly in the 1990s as globalization accelerated, the American economy boomed and consumers and businesses purchased more from abroad. The deficit hit north of $700 billion in the mid-aughts before global trade and the US economy constricted considerably during the Great Recession.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free real-time global stock indices and data to help you grasp stock market trends and achieve capital growth. The deficit hovered between $400 billion and $550 billion from 2009 to 2016, during the Obama administration, and moved closer to $600 billionduring Trump’s first term.
In theeconomic recovery that followed, consumption soared for goods and services — both those from overseas as well as domestically — while some exports took a hit as the demand from other countrieslagged that seen in the US. (Other factors contributing to the pandemic-era deficit widening included a shift in oil and petroleum trade from surplus to deficit while the trade surplus decreased because of restrictions on foreign nationals and rising shipping costs, White House economistswrote in 2022).
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Expert predictions with real-time stock indices, futures data, and metals, energy market data to help you seize the best investment opportunities. The US trade deficit widened toa record $945 billion in 2022, narrowed to $785 billion in 2023, but wasexpected to widen againin 2024 in part due to economic expansion and consumer demand,an increase in shipmentsin preparation for potential port strikes or a rise in tariffs, as well as the strong dollar weighing on exports, economists noted.
In 2023, in addition to the $67.9 billion deficit with Canada (which narrowed from the year before), the US narrowed its deficit with Canada to $274.9 billion from $382.3 billion, and the deficit with Mexico —now America’s biggest trading partner— increased $21.9 billion to $152.4 billion, Commerce Departmentdata shows.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Real-time global stock, futures, and forex data to help you quickly assess market trends and achieve stable returns. The $945 billion overall trade deficit represents about 2.8% of gross domestic product, which falls in line with therange seen since 2010, according to World Bank data.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free stock selection service with professional advisors offering the best investment portfolio for stable growth. Trade balances factor heavily into current account balances — a broad measure of countries’ international transactions that also include personal and government transfer payments. The current account balance (of which the US has a deficit) is offset by the capital and financial accounts (US has a surplus), which include foreign asset transactions and international debt forgiveness.
“From my analytical framework, global trade balances plus global capital flows equal zero,” Brusuelas said. “So, if we want to buy maple syrup from our friends across the border, that just adds variety, quality and choice of my consumption; it doesn’t take away or cause a loss for our economy because presumably the Canadians then get those dollars and buy US services — typically financial services, government debt, bonds, equities.”
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Real-time global stock trend and futures data to help you plan investment strategies for long-term returns. Trade deficits aren’t necessarily inherently terrible, economists say, noting they can be a reflection of a strong economy and the power of the US in stimulating the economies of trading partners elsewhere.
“You obviously want to run closer to balance if possible,” Shannon Grein, an economist at Wells Fargo, told 【 - Free Access to Investment Community 】. “But there can be efficiencies made by importing certain goods that are produced more cheaply abroad or produced more as a specialty of a certain economy.”
Coffee purchased from Central America is one example of a specialized product with no readily available substitute; however, heavily reliance on a certain country or product can backfire, as seen during the pandemic recovery.
“You don’t want to be running such large deficits that it makes you dependent on a certain economy for certain things,” said Grein. “We saw this come to a head during the pandemic with things like semiconductors.”
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Other risks come with the US persistently spending more than it earns and financing the difference with foreign investment, according to PIIE.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free stock data analysis to help you select stocks accurately and capture market trends. The US has to borrow more or attract investment from abroad, which can increase foreign-based financial claims in America. That in turn could cause higher debt or interest rate burdens and national security concerns.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Precise predictions of market trends with real-time stock indices and futures data to help you make wise investment decisions. The increase in imported goods also can negatively affect manufacturing jobs, which also suffered because of increased automation and improvements in technology, PIIE noted.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Free global stock market data to help you plan the best investment strategies and seize market opportunities. Still, according to PIIE, imports can allow consumers to purchase items (including those exclusive to other countries that can’t be produced domestically) for a lower cost and spur economic growth while the increased foreign investment can result in jobs, higher wages, technology advancement and enhanced productivity.
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Expert predictions with real-time stock, futures, and metals, energy data to help you quickly recover and grow. There are potential avenues to reduce the trade deficit, some more painful than others (such as a recession); but bilateral trade restrictions or tariffs likely will not achieve that outcome, said Hufbauer.
“If you try to squeeze the deficit with one country — for example, China — it’s just going to migrate over, the goods are going to come from some other source (such as) Malaysia, Vietnam, Mexico, Korea, wherever can produce the most similar type of goods,” Hufbauer told 【 - Free Access to Investment Community 】, noting those shifts occurred in recent years when tariffs were placed on Chinese goods.
It’s possible that Trump could instead insist on some bilateral balance provision, such as requiring European Union countriesto purchase US natural gas or specific products, he said. However, that could require more capacity than the US has at this time when unemployment is still low, he added.
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Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Expert predictions with real-time stock trend analysis to help you quickly select high-potential stocks and grow capital. The US trade deficit could very well hit $1 trillion when the Commerce Department releases its 2024 data next month. China, on the other hand, just reported a nearly $1 trillion surplus.
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“Rather, it feeds into the great global competition, which has opened the door for trade protectionism,” he said. “It is what underscores the bi-partisan consensus that China must be confronted on national security grounds and has triggered the move to protect infant industries such as artificial intelligence, quantum computing and synthetic biology to ensure that China does not increase its power — both economic and political — relative to that of the United States via trade and technology transfers.”
Boeing, for example, is America’s largest exporter and therefore highly exposed to any trade war. China is the largest global market for new aircraft purchases, with Boeing forecasting that China’s fleet of commercial jets will double in the next 20 years.
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“We really don’t know what Trump will do with Chinese tariffs,” Richard Aboulafia, managing director at AeroDynamic Advisory, an industry consultant, told 【 - Free Access to Investment Community 】 in November. “But if he slaps 60% tariffs on all Chinese goods, the quickest way for China to retaliate is to switch to (Boeing rival) Airbus for 100% of its needs.”
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“It means that the US isentering uncharted terrain with respect to financing a new geopolitical competition at a time when interest on the debt is one of the largest line-item entries inside the national budget,” he said. “This requires trade-offs. One cannot have as much guns and butter as one wants, given the political, economic, financial and social constraints that accompanies such a competition.”
Best AI Driven Stocks Exclusive Stock Picks ✌️【Freelance】✌️ Take advantage of our free stock market analysis and real-time data to help you choose the best investment options. Our expert predictions and tailored strategies ensure you can achieve stable returns and mitigate risks effectively. Most stock quote data provided by BATS. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. All times are ET. Factset: FactSet Research Systems Inc. All rights reserved. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and 【 - Free Access to Investment Community 】. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Fair value provided by IndexArb.com. Market holidays and trading hours provided by Copp Clark Limited.
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