Guy on Nostr: A trade deficit with China means freshly created US dollars go to China while real ...

A trade deficit with China means freshly created US dollars go to China while real goods and services go to the US. The dollars eventually come back to buy real goods and services from the US. Ultimately, it is real goods and services that US people owe Chinese people after a long trade deficit. Perhaps that means selling university educations. Perhaps that means selling farmland. People seem to be pushing back on some of these sales indicating they may not have wanted to have to give goods and services later for goods and services earlier. Or maybe they're hypocrites. There does not need to be a conflict about it, as you correctly allude. But a persistent net trade deficit when considering all trade is probably not a natural phenomenon and could lead to a shock later when the inflated dollars come home.

You are right that tariffs are bad for everybody. It is strange that so many countries use them.