Trade Gap Narrows

In the article “Trade gap narrows, but consumers wary” it points out that for the past two months the trade deficit has gone down, but not fast enough for Democrats. Now that Democrats have control of the House and the Senate they plan on increasing tariffs and putting pressure on WTO. I think it is great to try and close the trade gap but I don’t think we should try to limit products that we import, as much as try to increase the amount of valuable products we can produce.


Jessica said...

I agree with the posted blog. We need to be careful with the way that we approach the WTO concerning the issue. We have learned through Sarbanes Oxley that once a government agency becomes involved it is more costly to run businesses. Perhaps, we need to find other avenues, instead of tariffs to close the gap. Tariffs and other negative trade taxes will only destroy the global economy. We are all tied together, do you think that the Chinese would want to help fund our debt if we place tariffs on their goods? I think not.

Dr. Tufte said...

It may be worse than you suspect, Eric. A trade deficit means you import more than you export. A declining deficit means we're importing less or exporting more. The former means we are not doing well, since we're not buying other people's stuff. The latter means that other people are buying our stuff, because they are improving faster than we are.