just blink once for yes and twice for no

china has a fixed exchange rate and the usa has floating exchange rate

when the usa imposes tariffs, our imports go down and our nominal exchange rate goes up. in other words it deflates our own currency, which reduces exports abroad because our currency becomes relatively more expensive.

but when china imposes tariffs, their central bank keeps their currency's exchange rate the same, so they don't lose on the back end the way we do.

tl;dr we can't beat them at their game because they're playing by different rules

ScreaminAsian, I’m among the proponents for USA adopting the unilateral trade policy described in Wikipedia’s arti-cle entitled “Import Certificates”. It’s more market rather than government driven. Regardless of how other nations react to the policy, it would increase USA’s GDP and numbers of jobs more than otherwise.
Values of all globally traded goods are assessed at their approximate values in USA ports or within USA’s domestic marketplace. Assessments are expressed in current U.S. dollars.

It's a unilateral policy; No nation is required to purchase from another.
Respectfully, Supposn

Why are you so sure that reducing imports would increase GDP? The reason imports are in the "GDP Equation" is that they're already captured in other terms, if we reduced the rate of imports, wouldn't those other terms drop as well? Isn't everything you post based around an assumption that isn't backed up by any sort of data?

Yes. To measure GDP (i.e., production within the United States), you go around and see how much is *consumed* within the U.S., then you adjust for items consumed in the U.S. but not produced here (imports) or produced here but not consumed (exports). So, for example, you would see that a car was sold to a U.S. person for $30k. That's $30k of consumption, and let's assume that all the manufacturing was done here too. Then you need to check to see whether any of the components were imported. Let's say that $5k of raw steel was imported. That means that the net contribution to GDP from this manufacturing was $25k, which is $30k of consumption minus $5k of net imports.

In this example, you can't simply assume that if the imported steel was not available, it would be replaced on a one-to-one basis with domestic steel. If that happens, then the car sells for $30k, there is no import adjustment, and the contribution to GDP is $30k. However, it's just as possible that less imported steel means fewer cars are sold, and the $30k car we are talking about is *never actually produced.* In that case, you still don't have a $5k "drag" on GDP from the import of the steel, but you also don't have the $30k of consumption! So the net effect on GDP is negative $25k.

EDIT: As an analogy, imagine that you are trying to figure out how much your cat weights. One way to do it is to pick up the cat and weigh yourself. Then you get on the scale without the cat, and see what the difference in the two measurements is. Mathematically, you subtract your weight from your weight holding the cat to arrive at the cat's weight alone. However, it makes no sense to describe your weight as a "drag" on the cat's weight. The cat weighs what it weighs, you're just trying to measure it.

dont argue with it (supposn), i think it's a poorly programmed posting bot.


edit: good post bobman- can we create a bot to refute every one of supposn's new posts with that response?

JT217and BobMan0330, USA’s GPD is the nation’s entire spending for final products, plus or minus its net balance of foreign trade. The formula’s logic is obvious. If the nation ceases to import, what are the alternatives for which the nation can spend its wealth?

[Transfers of wealth are not factored within calculations of GDP. The investments that are factors within GDP, were spent for final purchases of products on behalf of the nation’s enterprises. There have been no determinations as to how in the future those transfers may eventually be spent. But net transfers leaving the USA are less likely to be spent for the purchases of USA products. Final determination as to how or when transfers of wealth will or will not contribute to the nation’s future GDPs has been delayed and/or undetermined.]

JT217, transfers of wealth and purchase of imports do not contribute to the nation’s GDP. What else can the nation spend for that does not net contribute to the nation’s GDP? What (if any specific) assumptions are you referring to?

Respectfully, Bernard Belitsky

bobman0330 couldn't have laid out more simply that imports do contribute to GDP, go back and really study Wikipedia.

Otatop, BobMan’s post was responded to within post #32.
Nation’s net balances of international trade affect their GDP.

Nations with annual trade surpluses increased, and those with annual trade deficits decreased their annual GDP due to their international balances of trade. What does was your remark mentioning Wikipedia refer to?

Respectfully, Supposn

Don't the bolded statements assume that there's a bunch of extra capacity in the US economy that could be deployed if we all of the sudden stopped importing things? Why do you think that that's true?

JT127, why would you believe that the USA would or should not participate in global trade?
I’m proponent of USA adopting the improved version of trade policy described by Wikipedia’s article, “Import Certificates”. It will not tolerate USA’s huge and chronic annual trade deficits of goods. (Valuation of globally traded goods for the purpose of this policy exclude the values of any materials integral to those goods, that are explicit items on a list of scarce or precious minerals).

Import Certificate policy effectively limits USA import values of goods to that of our exports. It does not discriminate among foreign nations or industries. It behaves as an indirect but effective subsidy of its nation’s export goods prices and that should hopefully promote increasing its nations values of exported goods. USA goods that are now too expensive for global trade may then possibly be exported.

Respectfully, Supposn

But why?

Otatop, what did you actually read? Respectfully, Supposn

Excerpted from https://en.wikipedia.org/wiki/Balanc...de#cite_ref-43 .

Trade balance’s effects upon a nation's GDP
Exports directly increase and imports directly reduce a nation's balance of trade (i.e. net exports). A trade surplus is a positive net balance of trade, and a trade deficit is a negative net balance of trade. Due to the balance of trade being explicitly added to the calculation of the nation's gross domestic product using the expenditure method of calculating gross domestic product (i.e. GDP), trade surpluses are contributions and trade deficits are "drags" upon their nation's GDP.[44][45][46] ...

... (44) Staff, Investopedia (11 May 2010). "Expenditure Method". Retrieved 15 March 2018.
(45) Analysis, US Department of Commerce, BEA, Bureau of Economic. "Bureau of Economic Analysis". www.bea.gov. Retrieved 15 March 2018.
(46) "gross domestic product - Definition & Formula". Retrieved 15 March 2018.

I see, so if you define "GDP" to account for trade deficits, trade deficits affect GDP


makes sense

The GDPs of trade surplus nations were increased, and trade deficit nations were decreased, due to their nation’s international balance of trade. The values of a trade deficit nation’s purchases exceeded the value of what they produced. Annual trade deficits are always net detrimental to their nation’s GDPs and drag upon their numbers of jobs.
Although USA is the world’s largest trade deficit nation, there are those contending that due to our trade deficits’ lesser proportions to our GDPs, and our lesser dependence upon exporting, trade deficits detriment to our economy is of lesser significance.

I’m in agreement with those contending the greater extent of our trade deficits’ dangers and harms, analogous to those of floating icebergs, are much less perceivable. We can quantify USA’s net balance of international trade, but we cannot reasonably estimate the value of what we do not produce due to imports crowding our own products out of our own domestic markets. I share the contentions of economists who for various reasons appreciate USA’s annual trade deficits significant detrimental effects upon our economy is much greater than others believe.

Respectfully, Supposn

An internet bot, also known as web robot, WWW robot or simply bot, is a software application that runs automated tasks (scripts) over the Internet. Typically, bots perform tasks that are both simple and structurally repetitive, at a much higher rate than would be possible for a human alone. The largest use of bots is in web spidering (web crawler), in which an automated script fetches, analyzes and files information from web servers at many times the speed of a human. More than half of all web traffic is made up of bots.

Respectfully, otatop

The GDPs of trade surplus nations were increased, and trade deficit nations were decreased, due to their nation’s international balance of trade. The values of a trade deficit nation’s purchases exceeded the value of what they produced. Annual trade deficits are always net detrimental to their nation’s GDPs and drag upon their numbers of jobs.
Although USA is the world’s largest trade deficit nation, there are those contending that due to our trade deficits’ lesser proportions to our GDPs, and our lesser dependence upon exporting, trade deficits detriment to our economy is of lesser significance.

I’m in agreement with those contending the greater extent of our trade deficits’ dangers and harms, analogous to those of floating icebergs, are much less perceivable. We can quantify USA’s net balance of international trade, but we cannot reasonably estimate the value of what we do not produce due to imports crowding our own products out of our own domestic markets. I share the contentions of economists who for various reasons appreciate USA’s annual trade deficits significant detrimental effects upon our economy is much greater than others believe.

Respectfully, Supposn

Kool?

Credible economists do not refute annual trade deficits detrimental effects upon their nation's GDP.

To the extent that USA products were “crowded out” of marketplaces by foreign goods, effectively due to USA's chronic annual trade deficits, our nation's GDPs were less than otherwise.

A nation's lesser annual GDP reflects their nation's lesser than otherwise numbers of jobs and aggregate payroll amounts.

Annual trade deficits indicate the nation has purchased greater values of products than it has produced.

Rarely, if ever do credible economists refute any of these contentions and this holds true even among those economists that may be the most ardent proponents of pure free trade.

Respectfully, Supposn

name them

This reads like you just copy pasted the middle of a federalist article

I’m a proponent of the policy described within Wikipedia’s “Import Certificates” article.