Are we factoring in digital/service trades? For example, Netflix is in Vietnam. There are many Netflix subscribers in Vietnam. Does that get factored into the trade deficit? Or is it only physical goods that get factored in?
Vietnam uses many US services such as Microsoft Office, Netflix, ChatGPT, Facebook ads, etc. This is revenue that directly go into the pockets of American companies.
No services, only goods. This is according to @JamesSurowiecki on Twitter, one of the first to reverse engineer the equation for how they’re coming up with the numbers. So Office, Netflix, etc wouldn’t count against the deficit.
This is where the calculation is extremely unfair to a country like Vietnam. They export low value physical goods and import high value services like ChatGPT, engineering consultations, etc.
They're getting screwed by this tariff plan.
Any tariff based on trade deficit needs to account for services.
You shouldn't put tariffs based on deficits period because it's a brain dead way to think about international trade. The whole idea is flawed from the jump so there's no way to make it rational, it's inherently irrational.
No it doesn't. Trump's whole issue here isn't making more money for the federal government. His issue is that the American economy no longer works for you if you are a blue collar worker.
The services we export are performed largely by white collar, college educated people. A good number of whom are here on H1-B visas. What service can an unemployed factory worker export to Vietnam? We have to end globalization of industry or wealth inequality will just continue to spiral.
There are ~600k H1B visa holders in the US. the tech sector alone has ~10M workers, and professional workers are ~9x that again. That boogeyman represents < 1% of the relevant workforce.
“White collar” work is the majority of US employment. It’s unclear to me if you’re proposing sacrificing white collar for blue collar jobs, but that’s not a trade our economy overall wants to make.
Relatedly, the unemployment rate for US factory workers is 2.9%. This is a very low unemployment number - 5% is generally considered “full employment,” and anything below that indicates a labor shortage. So your hypothetical factory worker should probably just go get another job.
I don't understand the nostalgia for manufacturing jobs.
My mom worked in a factory putting pickles into glass bottles. It was not her dream job. I can still remember how she smelled after a shift.
But it was the only employment she could find in that village.
Things got better when we moved after a few years and she shifted into a healthcare job. White collar if you will.
His issue is actually that Putin told him to jump, and so he has to jump. You're utterly delusional if you think Trump gives a single diaper filled with shit about the "blue collar workers"
I'm glad I read your comment because I've been wondering the whole time whether services are factored in. It's absolutely insane that the administration is ignoring the exported value of some of the biggest companies in America that all these countries are buying services from.
Of course not. The entire time Trump is railing against the deficit, he's talking only about goods. He wants to bring back manufacturing to America, didn't you hear?
Vietnam uses many US services such as Microsoft Office, Netflix, ChatGPT, Facebook ads, etc. This is revenue that directly go into the pockets of American companies.