Negative Impacts of having a Trade Deficit with China
Sorry everyone, but I totally ran out of ideas for a blog this week, so I am going to share some extremely interesting facts about the consequences of a trade deficit with China (being sarcastic here), and talk a little bit about Donald Trump. So for MCOM this week we had to do presentations about an article we wrote, and I chose this as my topic. . .
I actually did quite a bit of research on this topic and found that there are 3 big consequences: (1) the deficit country has an increased national debt and slowed economic growth; (2) the deficit country experiences an increase in job loss as jobs are exported out of the country; and (3) the surplus country has the opportunity to manipulate currency. I noticed that throughout Donald Trump’s campaign he mentioned these negative impacts, however I wonder if they were really blown out of proportion. From the economic journals I read through, these impacts only are a serious concern when the deficit is held over long periods of time. It made me wonder if China was seen as an easy scapegoat for the reason why jobs have been decreasing in America.
To help everyone have an easy article to get their 2 mandatory comments per week, you could answer the question “do you think that Donald Trump blew the trade deals with China out of proportion?” or maybe “do you think that a trade deficit with China is a bad thing or is it alright since we are getting products for so cheap.”