Edward Conard

Top Ten New York Times Bestselling Author

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  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

AI Summary. The US goods trade deficit with China equals about 1% of GDP, while the overall US goods deficit has run near 4% of GDP since after the 2008 financial crisis. Eliminating it would raise domestic goods output, likely at the expense of services, but at most would return manufacturing employment shares to levels of a decade or two earlier.

Martin Wolf Financial Times
Date Posted:

Martin Wolf argues eliminating the US goods trade deficit of ~4% of GDP would at most bring manufacturing “employment shares to the levels of a decade or two ago.”

Would eliminating the goods trade deficit meaningfully restore manufacturing employment?

Core argument: The US bilateral goods trade deficit with China equals only 1% of GDP, while the overall US goods deficit has run around 4% of GDP since just after the 2008 financial crisis.

The bilateral US trade deficit in goods with China is only 1% of GDP. The overall US deficit in goods has been around 4% of GDP since just after the 2008 financial crisis. If that were eliminated (probably impossible, given US competitiveness in services and the macroeconomic forces causing US trade deficits), it would indeed increase domestic output of goods (presumably at the expense of services). But the very most it is likely to do is to bring employment shares to the levels of a decade or two ago.

Takeaways by Macro Roundup® AI

  1. The US bilateral goods trade deficit with China equals only 1% of GDP, while the overall US goods deficit has run around 4% of GDP since just after the 2008 financial crisis.
  2. Eliminating the US goods deficit is probably impossible given US competitiveness in services and the macroeconomic forces that cause US trade deficits.
  3. Eliminating the US goods deficit would raise domestic goods output, presumably at the expense of services, but at most would return employment shares to levels of a decade or two ago.

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  • Manufacturing Jobs Boom Not Reaching Places Hit By The China Shock — U.S. manufacturing job growth since the pandemic is occurring disproportionately in counties least exposed to Chinese import competition in the 2000s, according to an analysis of federal employment and wage data. The counties hardest hit by that import competition still have fewer manufacturing jobs than before the pandemic.
  • Trade Intervention for Freer Trade — The authors argue the United States should counter surplus countries' trade policies either by restricting their goods exports through tariffs or by restricting their capital inflows through taxes, volume limits, reserve requirements, transaction approvals, or investor eligibility rules. They contend capital controls are a more targeted alternative to uniform tariffs, which impose equal costs on more and less mercantilist countries.
Showing 56 database articles primarily about Trade (not deficits)