There's nothing wrong with trade defecits or imbalances, especially bilateral ones. Most economists see them largely as the result of bigger economic forces: Americans spend more than they produce, and imports fill the gap
A trade defecit means the dollar is strong, which is a good thing.
If you think of economics as a competitive game among nations, who wins? The winner is the nation that provides the most goods and services to its citizens. A trade deficit with China means we end up with more goods and services than they do. We win. Although I was never big on the Chicago School types, I thought Milton Friedman explained this concept very clearly: when we give someone a little stuff and get a whole bunch of stuff back, we're winning. It's not that hard to understand.
They end up with more currency, but you can’t eat currency or build stuff with it.
In the steel example, by importing steel, we end up with more steel than if we made it ourselves. That means we can make more of the stuff that needs steel. That results in additional jobs in those manufacturing sectors. It also means that product made with steel are cheaper for everyone.
You make a compelling argument as usual. Lets concentrate on Milton Friedman concept which I happen to agree by the way. So what has America gotten back over the last decade(s). More unemployment , manufacturing jobs disappearing, jobs going abroad. Any logical person will see that there is something wrong with this picture. The trend has been going in one direction. So it is false to assume that Milton Friedman's concept will work in all situations. I don't blame his concept I blame the politicians that veered away and allowed countries such as China to cheat and steal American technology. Politicians turned a blind eye to this and Trump is correcting it. He is not against trade, he wants fair trade is that too much to ask ?
Trumps goal is not to create tariffs, on the contrary he wants to eliminate them all together. He is using his negotiating skills to achieve that goal.
You impose tariffs on countries that have high tariffs on American goods for the purpose of convincing them to lower or eliminate tariffs. It may or not work but it is worth a try but I am confident it will.
