Trade wars continue to hurt US economy says Creighton’s Prof. Goss

August 20, 2029 – According to Creighton University’s Professor of Economics and national spokesperson on the international economy Professor Ernie Goss, “In opposition to sound economic theory and US equity markets, President Trump assumes his actions against Chinese imports will reduce the nation’s trade deficit and force some US companies producing in China to move production back to the US.”

Trump vs China

Since enacting tariffs in 2018, the trade deficit has increased by almost 15% from $114 billion in the first quarter (Q1) of 2018 to $130 billion in Q1, 2019.

“Contrary to President Trump’s goal of reducing the trade deficit,” explained Prof. Goss, “a smaller trade deficit normally accompanies a US recession. For example, in the 2008-09 recession, the trade deficit fell by 52.2% from $180 billion in Q1, 2008 to $86 billion in Q1, 2009. Over the last four decades, the US achieved a trade surplus only twice, 1981 and 1991, both recession years. Thus, a US recession, instead of tariffs, would be a more effective way of reducing the trade deficit.”

“Furthermore, he said, “instead of seeing the trade deficit with China as ‘bad,’ Chinese imports have provided US consumers with high quality goods at a low price. At the same time the Chinese return the US consumer dollars spent on Chinese imports by purchasing US Treasury bonds, thus lowering US interest rates.”

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