The answer to the question posed, "Is Trump accurate in saying we're getting fleeced on free trade?" is no.
Free trade may be good or bad, but the fundamental Trumpian premise - that the trade deficits that we have are evidence that it is bad - is flawed.
And for the explanation, I go back to one of the few things Toothsayer posted that wasn't copied and pasted from America's state run media.
Quote:
Originally Posted by ToothSayer
The US is the world-leading economy, manufacturer, researcher, with huge knowhow and advantages and original research which has driven enduring advantages, from Intel to 3M to Coke to Apple to financial products. The US leads almost everything in efficiency and knowhow, from chemicals to global consumer product brands to pharmaceuticals to chips to planes to agriculture.
This is accurate. Our economy is evolving past the "we have 300 million people capable of screwing two pieces of metal together" phase and into the "we design robots to screw pieces of metal together" phase.
So the followup question...
Quote:
How does such a country have a vast trade deficit if the playing field is equal?
... is answered quite simply. When we tell a Chinese factory to screw two pieces of metal for us, the export of IP doesn't count as an export but the assembled material counts as an import.
Of course we run trade deficits with poor countries because only physical goods count as having value.
I previously posted on the IP protection, and, yeah, it was a problem. It was a pretty big struggle at one point, and a small struggle now, to keep the IP away from being given away. But companies have learned to deal with it and managed it and that's kind of beside the point anyway.
Increasing trade deficits doesn't mean we're losing. Nor does decreasing our trade deficit mean we're winning.
Using trade deficit as a scoreboard is wrong. Trump is wrong in that regard, even if he is overall right about our trading deals being bad.