whiterock said:
ATL Bear said:
Osodecentx said:
China's Trade Surplus Tops $1 Trillion, Underscoring Its Export Dominance
Milestone boosts Chinese economy even as it fuels global trade tensions
By
Jonathan Cheng
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Updated
Quick Summary
China's trade surplus reached $1.08 trillion for the first 11 months of the year, a new record.
BEIJINGChina's trade surplus in goods this year topped $1 trillion for the first time, a milestone that underscores the dominance that the country has attained in everything from high-end electric vehicles to low-end T-shirts.
For the first 11 months of the year, China's exports increased 5.4% from the year-earlier period to $3.4 trillion, while the country's imports declined 0.6% over that same stretch to $2.3 trillion. That brought the country's trade surplus this year to $1.08 trillion, China's General Administration of Customs said Monday.
On the flip side, the U.S. has seen an increase in our trade deficit over the same period.
that is a feature of a structural trade deficit. Trade deficits tend to ebb & flow with overall GDP trends. Trade deficits will soften when the economy slows, and jump when the economy moves back into growth. That is exacerbated when economic stimulus is primarily focused on generating consumption, rather than investment.
The economy ran on Biden fiscal and trade policy until August. We're only 90 days into Trump policy, which is focused to a far, far greater degree on investment than any stimulus plan of our lifetime. The investments are starting. They will consume excess USD, easing the current softness in the value of USD (which is inflationary).
You, and this admin, are obsessed with the wrong structural deficit. It's like circular insanity.
First, there is no evidence yet of a surge in real investment beyond press releases and aspirational announcements. Capex doesn't magically materialize in 90 days. Long-cycle investments like the ones we're talking about take years to break ground, let alone generate the kind of dollar absorption needed to meaningfully counteract a structural deficit. So you are premature at best, wishful thinking at worst.
But even if I bought into all the investment hype, and everything was real and imminent, their scale wouldn't come close to absorbing the dollar supply expansion coming from trillion-dollar fiscal deficits. You can't offset massive deficit driven liquidity with hypothetical future factories. The math simply doesn't work.
Furthermore, tariffs are inflationary, not deflationary, and they hit consumer demand directly. They raise input prices for manufacturers, squeeze household income, and create margin pressure. That undermines the very investment climate you're claiming will flourish. You can't raise consumer prices, raise industrial input costs, and then claim this magically produces a burst of productive investment. And as we are seeing, countries and companies pivot to strategies that minimize tariff impact not only reducing tariff policy benefit, but only leaving the negatives on consumers and American businesses that can't adjust (hello farmer bailouts).
But the biggest contradiction in your argument, which makes me wonder if you understand economic strategy (and why I can only giggle at some of this administration's spin) is, you say trade deficits "ebb and flow with GDP", but tariffs are explicitly designed to slow imports by raising prices. Higher prices suppress consumption, and weaker consumption reduces GDP growth. So if Trump's policy is truly "investment-led" and "growth-focused," it's odd to rely on a mechanism that reduces purchasing power and demand.
The real risk going forward is demand erosion from inflation, from tariffs, and from a job market that is steadily softening. This policy mix that lifts prices while weakening consumer capacity is actually a counter and a drag on any investment boom, and hopefully doesn't go so far as to produce stagflationary pressures.
