Will the definitions be reduced from the trade deficit? Experts weigh

president Donald Trump He spent his first few weeks in his position in offering his commercial agenda, which has so far focused on increasing customs tariffs. Part of this strategy is Trump’s belief that definitions will help reduce the trade deficit.

After announcing a 25 % tariff for Mexico and Canada, Trump said that the two countries “must balance their trade” with the United States in order to consider not implementing this tariff, which is currently delayed until at least after the two countries announced border security measures.

“We have a deficit with almost every country – not every country, but almost – and we will change it.” Trump has also announced a higher tariff for products imported from China and plans to impose a mutual tariff on foreign commercial partners after a review that is expected to conclude by April 1.

In 2024, and American trade deficit In the goods, it grew 14 % in 2024 to reach a record of $ 1.2 trillion, while the trade surplus in America increased by 5.4 % to $ 293 billion – which led the previous year. With the growth of the trade deficit and the head aimed at narrowing it, Fox Business spoke with economic experts about whether the trade deficit is a problem that the customs tariff can suit.

The American trade deficit score will be Trump’s goal

Ryan Young, senior economists at the Institute of Competitive Institute, told people that people who buy goods and services from abroad are that they “appreciate what they get more than the money they give up.”

He added that commercial balances are not less than economic health in a country, good or bad, as this means only that many people make useful decisions, “noting that the United States is running a trade deficit for more than 50 years.

“The United States has managed a commercial deficit every year since the 1970s, yet living levels are better through almost every action, whether it is income, UnemploymentAverage life expectancy, the percentage of low -income families with air conditioning, the Internet and other goods, or almost any other procedure. “If the commercial deficit is harmful, then much of what we see everywhere around us every day should not be present,” Yong said. “Trump gives many reasons for his definitions. One trade deficit should not be. “

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Scott Lincum, Vice President of the General Economy at the Kato Institute, told Fox Business that Trump’s first period Definitions on China It can serve as an example of how it affects bilateral trade between the two countries as well as the general trade deficit.

“Trump imposed a tons of customs tariffs on steel, aluminum and Chinese goods-American bilateral trade balance between China has decreased slightly. But the US public trade deficit did not change, as a share of gross domestic product was mainly flat, and Lincicome said, noting that the deficit was Commercial with countries such as Vietnam has grown with a decrease in the trade deficit in China.

President Trump described the role of the US dollar as Reserve currency in the world Recently, the definitions that threatened the countries in the Brex Alliance if they tried to end this role. However, the dollar situation also contributes to the trade deficit.

Experts say that the customs tariff can be treated in the interest points plans in the Federal Reserve, amid enlargement concerns.

“The United States can manage a major commercial deficit for a somewhat unique reason, and this is the role of the dollar as a backup currency in the world,” Lincicome said. “Since the dollar in demand abroad, this actually increases the value of the dollar … in general, the dollar is the strongest of imports and reduces exports.

“In this case, the trade deficit itself is one of the symptoms of something good for the American economy and something that Trump loves,” he added.

Stephen Kamin, an older colleague at the Institute of American Institutions Specialized in Overall Economy and International Finance, told Fox Business that spreading customs tariffs as a way to re -return Manufacturing jobs It is unlikely to reformulate a large number of jobs.

“Much destroying manufacturing functions was caused by technological change, not because of the import competition,” Kamin said. “Many of this bleeding was primarily from manufacturing functions to low -cost countries like China, such as Mexico, was somewhat inevitable. We were never these jobs, and most importantly, the imposition of definitions at this stage would bring some, but not, not, But not some of that.

The economist provides a plan from the two parties to avoid the financial crisis by installing the increasing national debts in America

Kamin also pointed out that the federal financial government Budget He plays a role in contributing to the American trade deficit.

If you look at the private sector in the United States – families and companies – they actually gain more than they spend Consumption and investment. Therefore, mainly, our own sector works with a small surplus. “It is the government that offers a great deficit, so if you are serious about reducing the trade deficit, you will take it down from the financial deficit,” Kamin said.

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“The commercial deficit does not matter, the financial deficit is important. The reason for this is that the financial deficit leads to the top Government debt“Kamin said.” As this debt grows, it competes with the private sector to borrow money and pay interest rates. And if this debt increases significantly, the interest rates in the sky may rise – and this is far away in the future – it can lead to a financial crisis. “