Jason Furman

Just define it for us. A trade deficit is when you pay more money to another country in exchange for the stuff you're buying from them than they pay you in exchange for the things that they buy from you.

Just define it for us. A trade deficit is when you pay more money to another country in exchange for the stuff you're buying from them than they pay you in exchange for the things that they buy from you.

The one thing that is definitely not bad is trade deficits with any individual country. Even if overall we didn't have a trade deficit, there would still be some countries where we really love their products and we need them, and so we have a trade deficit with them, and some other countries where it's the opposite. So right now Brazil buys a lot of energy stuff from the United States,

The one thing that is definitely not bad is trade deficits with any individual country. Even if overall we didn't have a trade deficit, there would still be some countries where we really love their products and we need them, and so we have a trade deficit with them, and some other countries where it's the opposite. So right now Brazil buys a lot of energy stuff from the United States,

So we have a surplus with them. France makes a lot of food and chemicals that we need here in the United States. And so we run a trade deficit. Overall, if the trade deficit is really, really large for a really long period of time, it can be unsustainable. Don't think that's where the United States has been.

So we have a surplus with them. France makes a lot of food and chemicals that we need here in the United States. And so we run a trade deficit. Overall, if the trade deficit is really, really large for a really long period of time, it can be unsustainable. Don't think that's where the United States has been.

The United States doesn't run out of money because all of those dollars that we send abroad get reinvested and come back to the United States. building factories in the United States, financing our government debt.

The United States doesn't run out of money because all of those dollars that we send abroad get reinvested and come back to the United States. building factories in the United States, financing our government debt.

In fact, we've had this trade deficit for decades now, and we're still actually making a profit every year financially from the rest of the world because our investments overseas pay more than their investments do in the United States.

In fact, we've had this trade deficit for decades now, and we're still actually making a profit every year financially from the rest of the world because our investments overseas pay more than their investments do in the United States.

Yeah. Tariffs are a tax on yourself. So it's not obvious that you want them to be higher. What are the countries with high tariff rates? They're places like North Korea, Venezuela. I don't think we want to emulate them. I think we'd like to be more like the rich, dynamic countries like, say, the United States, which has benefited from its openness to trade.

Yeah. Tariffs are a tax on yourself. So it's not obvious that you want them to be higher. What are the countries with high tariff rates? They're places like North Korea, Venezuela. I don't think we want to emulate them. I think we'd like to be more like the rich, dynamic countries like, say, the United States, which has benefited from its openness to trade.

Moreover, other rich countries actually have quite similar tariffs to the United States. Most of them have 1% or 2% on us. We have 1% or 2% on them. It is true that China's and India's of the world have higher tariffs, but their tariffs are like 6% on the United States while ours were 1% on them. So we'd only need to raise tariffs by a few percentage points if we even wanted to match them.

Moreover, other rich countries actually have quite similar tariffs to the United States. Most of them have 1% or 2% on us. We have 1% or 2% on them. It is true that China's and India's of the world have higher tariffs, but their tariffs are like 6% on the United States while ours were 1% on them. So we'd only need to raise tariffs by a few percentage points if we even wanted to match them.

Not that I think that should be our goal.

Not that I think that should be our goal.

First of all, the United States is producing more than it's ever produced in manufacturing. It's just doing it with less people. And that's because of the enormous increase in productivity growth. But let's say you wanted to use trade policy to bring manufacturing jobs back.

First of all, the United States is producing more than it's ever produced in manufacturing. It's just doing it with less people. And that's because of the enormous increase in productivity growth. But let's say you wanted to use trade policy to bring manufacturing jobs back.

You wouldn't do what the president just did, which is to put tariffs on all the bananas, mangoes, avocados, and coffee coming into the United States. Those just aren't things that we're really ever going to make at enormous scale.

You wouldn't do what the president just did, which is to put tariffs on all the bananas, mangoes, avocados, and coffee coming into the United States. Those just aren't things that we're really ever going to make at enormous scale.

Moreover, the types of things that they do in Vietnam, you know, making clothing, making shoes, that's not the jobs that we should be aspiring to have in the United States. We don't want to give up jobs making airplanes in order to have jobs. more jobs making shoes.

Moreover, the types of things that they do in Vietnam, you know, making clothing, making shoes, that's not the jobs that we should be aspiring to have in the United States. We don't want to give up jobs making airplanes in order to have jobs. more jobs making shoes.

Finally, these tariffs themselves, I think, will likely end up hurting manufacturing, not helping it, because they blow up global supply chains, raise the cost of inputs to American businesses, and our businesses are now having to deal with tariffs in lots and lots of other countries in retaliation for what we've done.

Finally, these tariffs themselves, I think, will likely end up hurting manufacturing, not helping it, because they blow up global supply chains, raise the cost of inputs to American businesses, and our businesses are now having to deal with tariffs in lots and lots of other countries in retaliation for what we've done.

The difference is the scale and the lack of focus. In his first term, he raised the average tariff rate from about 2.5% to 4%. This time, he's gone from 4% to 25%. So it's more than 10 times larger increase in less than four months than he did in his entire four years. Second, the tariffs last time were very much focused on China.

The difference is the scale and the lack of focus. In his first term, he raised the average tariff rate from about 2.5% to 4%. This time, he's gone from 4% to 25%. So it's more than 10 times larger increase in less than four months than he did in his entire four years. Second, the tariffs last time were very much focused on China.

And there's a lot of good arguments for and against focusing your tariffs on China. Here, they're just willy-nilly sprayed all around the world in sometimes ways that looked just random and definitely not thought out.

And there's a lot of good arguments for and against focusing your tariffs on China. Here, they're just willy-nilly sprayed all around the world in sometimes ways that looked just random and definitely not thought out.

Almost every economic forecaster has lowered their forecast of growth quite a lot. Most are not predicting a recession but you never know. Almost every economic forecaster has raised their forecast for inflation, and American families should expect to see higher prices basically starting almost right away.

Almost every economic forecaster has lowered their forecast of growth quite a lot. Most are not predicting a recession but you never know. Almost every economic forecaster has raised their forecast for inflation, and American families should expect to see higher prices basically starting almost right away.

Over the longer run, if something like this lasts, I expect us to have basically worse-paying jobs as we have more people working to make shoes and T-shirts for Americans and fewer people making airplanes and tech products for exports.

Over the longer run, if something like this lasts, I expect us to have basically worse-paying jobs as we have more people working to make shoes and T-shirts for Americans and fewer people making airplanes and tech products for exports.

You're going to see... less global trade. You're also going to see a shift in the pattern. Companies will move their factories from China to other countries. Now, you can't get all the way around these tariffs, but you can get less if you can move them out of China. So you'll see some changes in the pattern of global trade. You'll also see other countries integrating themselves

You're going to see... less global trade. You're also going to see a shift in the pattern. Companies will move their factories from China to other countries. Now, you can't get all the way around these tariffs, but you can get less if you can move them out of China. So you'll see some changes in the pattern of global trade. You'll also see other countries integrating themselves

in a greater way at the expense of the United States and cutting the United States out of those value chains as they try to find, for example, parts suppliers in Canada or somewhere else they think is more reliable than relying on American companies.

in a greater way at the expense of the United States and cutting the United States out of those value chains as they try to find, for example, parts suppliers in Canada or somewhere else they think is more reliable than relying on American companies.

Just define it for us. A trade deficit is when you pay more money to another country in exchange for the stuff you're buying from them than they pay you in exchange for the things that they buy from you.

The one thing that is definitely not bad is trade deficits with any individual country. Even if overall we didn't have a trade deficit, there would still be some countries where we really love their products and we need them, and so we have a trade deficit with them, and some other countries where it's the opposite. So right now Brazil buys a lot of energy stuff from the United States,

So we have a surplus with them. France makes a lot of food and chemicals that we need here in the United States. And so we run a trade deficit. Overall, if the trade deficit is really, really large for a really long period of time, it can be unsustainable. Don't think that's where the United States has been.

The United States doesn't run out of money because all of those dollars that we send abroad get reinvested and come back to the United States. building factories in the United States, financing our government debt.

In fact, we've had this trade deficit for decades now, and we're still actually making a profit every year financially from the rest of the world because our investments overseas pay more than their investments do in the United States.

Yeah. Tariffs are a tax on yourself. So it's not obvious that you want them to be higher. What are the countries with high tariff rates? They're places like North Korea, Venezuela. I don't think we want to emulate them. I think we'd like to be more like the rich, dynamic countries like, say, the United States, which has benefited from its openness to trade.

Moreover, other rich countries actually have quite similar tariffs to the United States. Most of them have 1% or 2% on us. We have 1% or 2% on them. It is true that China's and India's of the world have higher tariffs, but their tariffs are like 6% on the United States while ours were 1% on them. So we'd only need to raise tariffs by a few percentage points if we even wanted to match them.

Not that I think that should be our goal.

First of all, the United States is producing more than it's ever produced in manufacturing. It's just doing it with less people. And that's because of the enormous increase in productivity growth. But let's say you wanted to use trade policy to bring manufacturing jobs back.

You wouldn't do what the president just did, which is to put tariffs on all the bananas, mangoes, avocados, and coffee coming into the United States. Those just aren't things that we're really ever going to make at enormous scale.

Moreover, the types of things that they do in Vietnam, you know, making clothing, making shoes, that's not the jobs that we should be aspiring to have in the United States. We don't want to give up jobs making airplanes in order to have jobs. more jobs making shoes.

Finally, these tariffs themselves, I think, will likely end up hurting manufacturing, not helping it, because they blow up global supply chains, raise the cost of inputs to American businesses, and our businesses are now having to deal with tariffs in lots and lots of other countries in retaliation for what we've done.

The difference is the scale and the lack of focus. In his first term, he raised the average tariff rate from about 2.5% to 4%. This time, he's gone from 4% to 25%. So it's more than 10 times larger increase in less than four months than he did in his entire four years. Second, the tariffs last time were very much focused on China.

And there's a lot of good arguments for and against focusing your tariffs on China. Here, they're just willy-nilly sprayed all around the world in sometimes ways that looked just random and definitely not thought out.

Almost every economic forecaster has lowered their forecast of growth quite a lot. Most are not predicting a recession but you never know. Almost every economic forecaster has raised their forecast for inflation, and American families should expect to see higher prices basically starting almost right away.

Over the longer run, if something like this lasts, I expect us to have basically worse-paying jobs as we have more people working to make shoes and T-shirts for Americans and fewer people making airplanes and tech products for exports.

You're going to see... less global trade. You're also going to see a shift in the pattern. Companies will move their factories from China to other countries. Now, you can't get all the way around these tariffs, but you can get less if you can move them out of China. So you'll see some changes in the pattern of global trade. You'll also see other countries integrating themselves

in a greater way at the expense of the United States and cutting the United States out of those value chains as they try to find, for example, parts suppliers in Canada or somewhere else they think is more reliable than relying on American companies.