US tariff war has failed so far: monthly trade deficit increased to $131 billion

[franky1]

the making of the actual phone is the costly part.. where by if mostly made parts are chinese and its all shipped to the US for a quick 5 minute US assembly, to be classed as made in US, then gets the benefits of cheap parts but made in US status to skip passed tariffs

Then they add tariffs on those parts and make it a lot more expensive or maybe China retaliates and sells it at a higher price to US to make it more expensive so that they can't compete.

'then they add tariffs'??
are you really this ignorant? you have been told a dozen times how the avoid tariffs, heck i just gave you an example which you just quoted..
seriously please go learn about freeports..

But with all that aside you are forgetting the other objective of this economic war which is to weaken China and its massive economy. The US regime can not weaken China if they are still buying cheap parts made in China because that would still strengthen Chinese economy...

when america move parts to the US its not a fully assempled end product. thus china cant get sales tax from selling retail priced goods
when america put a tarriff on chinese finished goods, it makes chinese FINISHED goods more expensive to deter americans fro buying retail from china
(bothcases decrease chinas income of sales tax because people buy less chinise retail ready goods)
america does not get any tariff from chinese parts when using freeports

when america get parts that are lower cost than american made parts, america can assemble them to a retail ready good for american merchants.. so that america get the sales tax but without the tariff. thus making it cheaper to buy american for american consumers compared to american consumers buying from china

i seriously wish you would learn the economics of how this stuff plays out if you wish to continue injecting yourself into the conversation.
learn the freeport business model

[pooya87]

'then they add tariffs'??
are you really this ignorant? you have been told a dozen times how the avoid tariffs, heck i just gave you an example which you just quoted..
seriously please go learn about freeports..

Your problem is that you assume they are imposing tariffs only to increase their revenue. Whereas in reality the main objective is to prevent stuff from being imported so that they can beef up domestic production and save their economy. If they allow them to enter through freeports that would defeat that purpose.

when america get parts that are lower cost than american made parts, america can assemble them to a retail ready good for american merchants.. so that america get the sales tax but without the tariff. thus making it cheaper to buy american for american consumers compared to american consumers buying from china

Those parts are cheap because China decides to sell them to US cheap. If the war gets intensified more, one of the decisions the Chinese can make is to stop selling them cheap parts. It's not really that complicated.

Just review the recent history of the "chip war". In short US regime prevented chips and the technology to make them to be sold to China and China prevented rare material used in chip production from being sent to them and then developed their own domestic chip production technology which has now reached the Western competitors.

You are also forgetting that US is not just trying to compete with Chinese products domestically. But also internationally which is why they need domestic production to work. China has already taken over a lot of markets like automotive industry for example which is currently singlehandedly largest in the world with 30 million units produced per year taking the market out of the hands of US, Germany and Japan which were once dominating the market.

[takuma sato]

I just hope that Trump is not doing this to scalate things into a potential war so he can profit from having moved all production locally. There are some theories now of people claiming that the most pessimistic scenario is just that: Trump getting ready for a war-economy in which they would be the suppliers of many goods that wouldn't be available anymore elsewhere. They say that this may happen on his last year of the term and then try to keep himself in power. I used to believe those are conspiracy theories from the left but I think Trump is going to have an ego power trip that will increase as time goes on even more and he will think that he is doing the right think "to save america", including breaking any ways which he has already pointed to. I think we will see fireworks by 2029 unfortunately. The next years for the market are going to suck with this uncertainty unless we climb the wall of worry, but if Trump tries something stupid to stay in power the markets are going to tank like we haven't seen since GFC.

[wheelz1200]

Im not an expert nor am i trying to say if i believe it will or will not work.  But you need time to play out to see if its working or not.  Immediately there might be some instant adverse effects.  If it persists month over month then yeah might be an issue.  Crazy how many things changed so quickly.  In the end i dont think it will work as this administration intended.

[franky1]

'then they add tariffs'??
are you really this ignorant? you have been told a dozen times how the avoid tariffs, heck i just gave you an example which you just quoted..
seriously please go learn about freeports..

Your problem is that you assume they are imposing tariffs only to increase their revenue. Whereas in reality the main objective is to prevent stuff from being imported so that they can beef up domestic production and save their economy. If they allow them to enter through freeports that would defeat that purpose.

trump does not care about how many cargo ships of goods arrive.. what trump wants is consumers to use US retailers to buy goods that are labelled US Made so he can get the sale tax into the treasury
or if people still want imports meaning no sales tax.. but then he will get tariffs off the consumer instead..

however when it comes to manufacturing. he and businesses know raw material mining in the US -> finished good in the US will be expensive goods, which consumers wont want.
so there is the middle ground (via the freeport business model)

when america get parts that are lower cost than american made parts, america can assemble them to a retail ready good for american merchants.. so that america get the sales tax but without the tariff. thus making it cheaper to buy american for american consumers compared to american consumers buying from china

Those parts are cheap because China decides to sell them to US cheap. If the war gets intensified more, one of the decisions the Chinese can make is to stop selling them cheap parts. It's not really that complicated.

china would charge more on finished "ready for retail" goods being sent to the US.. but again (please please please learn about the freeport business model, it will help accelerate this conversation along instead of having to re-teach you in every post) if they do the freeport business model they can do things cheaply and avoid chinese government getting greedy in multiple ways

lets use the chips as a example to explain the quote above and below
previously US chip makers had to refine raw silica, smelt it, form it into ingots, cut, etch and polish it then fabricate it.. all costly if all done in the US

but if TSMC have a chinese facility, they can use chinese facility to do the first 2/3rds cheaply.. and because they done it cheaply in their chinese facility why would they then charge THEMSELVES(at the US facility) more just to send it to the US??.. reality is they are the same company on both sides of the ocean, so they will send it across the water 'at cost'

Just review the recent history of the "chip war". In short US regime prevented chips and the technology to make them to be sold to China and China prevented rare material used in chip production from being sent to them and then developed their own domestic chip production technology which has now reached the Western competitors.

You are also forgetting that US is not just trying to compete with Chinese products domestically. But also internationally which is why they need domestic production to work. China has already taken over a lot of markets like automotive industry for example which is currently singlehandedly largest in the world with 30 million units produced per year taking the market out of the hands of US, Germany and Japan which were once dominating the market.

30m cars a year is only 2.11% of chinese population (2.11% per capita)
thats like saying the US only does 7m cars.. oh wait the US actually makes 10.5m cars(3.18% per capita)... soo cars per domestic populous made per year, US wins

[pooya87]

You are also forgetting that US is not just trying to compete with Chinese products domestically. But also internationally which is why they need domestic production to work. China has already taken over a lot of markets like automotive industry for example which is currently singlehandedly largest in the world with 30 million units produced per year taking the market out of the hands of US, Germany and Japan which were once dominating the market.

30m cars a year is only 2.11% of chinese population (2.11% per capita)
thats like saying the US only does 7m cars.. oh wait the US actually makes 10.5m cars(3.18% per capita)... soo cars per domestic populous made per year, US wins

You seem to be on an entirely different page. In this topic (which you didn't read) and the comment you quoted (which you also didn't read) we are discussing how various plans including tariff war has failed to shrink the trade deficit. We are NOT discussing how they can increase domestic usage of their products for "per capita" rates to matter.

One of their plans to shrink it is that they want to export more not have their products used domestically more! Also as I said in my comment they want to compete with China internationally and push China out as an economic war to slow down Chinese growth. They can't compete if they are exporting about 1.4 million units (used to be 2.2 mil in 2014) and China exports over 6 million units and growing every year.

P.S. South Korea with 50 mil population is producing 4-5 millions units a year how much is that per capita

[dezoel]

heres an enlightening thought that will really get your goat

while you are worrying about the "deficit"
what if i told you there is no actual "deficit".. its just a statistic, given a dramatic label

its just a word that says another country gives more goods then takes.. the other country is under no obligation to take so much goods
if the UK does not want american chicken but america wants UK aberdeen angus beef so be it. .. supply and demand

no country should be forced to take american chlorinated chicken just to meet some mutual give:take balance
there is no deficit
its just a statistic, not an obligation to match

this is the part trump does have it wrong.. not the reciprocal tariffs, but the mindset that because america is not good at exporting, he believes other countries owe him and need to take his stuff by calling the imbalance of demand statistic a "deficit"

Interestingly, it is not only that, there is also a governmental spending that you need to consider for government spending too, which comes to same logic with inflation. Trade deficit and government spending are two main reasons why a countries currency could get worse, and USA also has that too.

Deficit for USA being high could just mean they have money to spend, and others don't, which makes sense. They are not selling as much, because other nations aren't as rich as USA, and USA keeps buying, because they are richer than others. That is a simple mathematics, and if one day USA can't afford to keep buying from others, they just won't, and deficit would fall, but until they can't, they are going to keep spending their money.

[franky1]

You are also forgetting that US is not just trying to compete with Chinese products domestically. But also internationally which is why they need domestic production to work. China has already taken over a lot of markets like automotive industry for example which is currently singlehandedly largest in the world with 30 million units produced per year taking the market out of the hands of US, Germany and Japan which were once dominating the market.

30m cars a year is only 2.11% of chinese population (2.11% per capita)
thats like saying the US only does 7m cars.. oh wait the US actually makes 10.5m cars(3.18% per capita)... soo cars per domestic populous made per year, US wins

You seem to be on an entirely different page. In this topic (which you didn't read) and the comment you quoted (which you also didn't read) we are discussing how various plans including tariff war has failed to shrink the trade deficit. We are NOT discussing how they can increase domestic usage of their products for "per capita" rates to matter.

One of their plans to shrink it is that they want to export more not have their products used domestically more! Also as I said in my comment they want to compete with China internationally and push China out as an economic war to slow down Chinese growth. They can't compete if they are exporting about 1.4 million units (used to be 2.2 mil in 2014) and China exports over 6 million units and growing every year.

P.S. South Korea with 50 mil population is producing 4-5 millions units a year how much is that per capita

maybe you dont realise this, but i have read it all. understood it all, run things through scenarios, used economic theory on it and came to a different conclusion then you, thus not congratulating you on your small ability to take something from the news... because its you that just took something from the news but do not understand the content or the real concerns or risks or effects to an economy due to the item mentioned in the news

maybe you dont realise im suggesting something to get you thinking, to get you to ponder further thought and dig a little deeper..

you might be trying now to scratch your head as you hit the reply button to shout things like im baiting you into a trap or other insults obscenities to avoid thinking deeper at the subject matter(as usual),.. well i kind of am baiting you. but more so trying to get you to look/think deeper at the subject and to get you to do some research.. or atleast some further maths by looking at things from a different angle so you can put things into context outside the click bait news narrative you are just repeating but not fully knowing of

..
oh fine ill spoil it for you(theres multiple points that can come from this, .. oh yep the bait and hook has many casts)
if a country's population only employs 1.3% in the car industry and makes 10.5m cars.. ill let you do some math
if another country's population employs 0.3% in the car industry and makes 30m cars.. ill let you do some math
it reveals their production efficiency
($ ~4.4m workers making 10.5m cars = 2.38 cars per worker)
(¥ ~4.2m workers making 30m cars = 7.14 cars per worker)

if a country that only manually makes say 10.5 cars per 340 population, then the demand for/efficiency of making/capacity of/excess of cars would be different to
if a country that only manually makes say 30 cars per 1411 population,
can reveal how efficient they can make cars but with less labour
can reveal the amount they are able to spare(after domestic demand) to then export

(i have other conclusions and baits which could have progressed the conversation down the economic conversation, but im getting too ahead of you in the economics to even try progressing the conversation)

anyway depending on how you answered my response about the 2.11% of capita and the 3.18% of capita would have shown what way you are thinking of things and if you even bothered thinking or even took the stats and run scenarios on..  and would result in how i progress the conversation.. but as usual you went down the excuse rabbit hole to not think in terms of economics and instead found an excuse to just fling an insult by saying im not even talking about the topic

when actually it was a bait point to then come back and remind you that if a country can only produce X cars per worker or only makes x cars per populous then the amount of cars available beyond the domestic demand affects the amount of cars needed to be imported to fill the demand. and how many

if country only makes Z but has domestic demand Y then it only has excess X to export and needs W imported
Z+/-W=Y
Z-Y= +/-X
Z-Y= +/-W
..
so it very much does need to know the domestic supply/demand to judge how things affect the import/export efficiency/deficiency

oh yes deficit is deficient as in opposite to efficient.. its not deficit as in debt/owing like you and media conclude
just because a country takes 400 but only gives 269 does not mean the other country needs/owes/required/indebted to take 130 extra just to be in balance
another country does not owe the deficient country. if asians just dont want american cars, they simply dont want them

it all would be clear if you try a little to run some scenarios and do some maths beyond just going with the emotions of a click bait stat which you didnt fully understand the economics at play of

..
now concentrating on the 2.11:3.18 'per capita' thing
the US make more cars per populous so YOU would conclude there should be more excess to export(bait).. however..(hook incoming)
..  the demand domestically is higher for those domestic cars, so the excess is lower, so much so that they actually need imports to fill the demand
so the w x y z equation needs to be looked at where Z affects X (deeper: how Y also affects X, which affects the X to W balance... but seems your not ready to talk about these things)

[Synchronice]

designing is the cheapest task, which makes the cost irrelevant in the big scheme of things
EG making a decision to go with X GB or Y GB, and have it as 'rose gold' instead of silver case for different models is just management decision. you dont need to hire outsiders for that.. if you know you are going to make 1billion phones to can spread the management decision costs into a billion small costs spread per phone which become less than a penny per phone cost for design

the making of the actual phone is the costly part.. where by if mostly made parts are chinese and its all shipped to the US for a quick 5 minute US assembly, to be classed as made in US, then gets the benefits of cheap parts but made in US status to skip passed tariffs

It's not really the cheapest task, it still costs them billions of dollars but my point is that, since they are so focused on saving money, why don't they save on the team that works on Apple Ecosystem? Maybe I'm wrong but I think that Apple can get the same level of ecosystem by hiring Chinese designers and developers instead of paying hundreds of thousands of dollars to local workers.

I understand what you want to say but my focus here is also on other things. I think that in the end, the USA can manufacture so good smartphone with such a good price tag that it will be cheaper than the ones made in China but sadly the USA doesn't force companies to do that and this approach of capitalism bring no good to the country to my mind. If the USA produces smartphones locally, they'll create a new job for local citizens, the quality of the product will be superb instead of cheap (that's what everyone expects), which means that your smartphone will last for 10 years instead of 3-4 years. Over time, manufacturing process will advance enough to create a good working conditions and also keep the local workers skilled for the job, it's a win to my mind. Today, China produces almost everything and is that really good? Won't the US pay for moving manufacturing into China? I think that they'll pay for this mistake and it will cost more than what they saved. It's just my opinion, correct me if you think I'm wrong.

[franky1]

designing is the cheapest task, which makes the cost irrelevant in the big scheme of things
EG making a decision to go with X GB or Y GB, and have it as 'rose gold' instead of silver case for different models is just management decision. you dont need to hire outsiders for that.. if you know you are going to make 1billion phones to can spread the management decision costs into a billion small costs spread per phone which become less than a penny per phone cost for design

the making of the actual phone is the costly part.. where by if mostly made parts are chinese and its all shipped to the US for a quick 5 minute US assembly, to be classed as made in US, then gets the benefits of cheap parts but made in US status to skip passed tariffs

It's not really the cheapest task, it still costs them billions of dollars but my point is that, since they are so focused on saving money, why don't they save on the team that works on Apple Ecosystem? Maybe I'm wrong but I think that Apple can get the same level of ecosystem by hiring Chinese designers and developers instead of paying hundreds of thousands of dollars to local workers.

the iphone designers are american. they then send the design to a chinese factory that then get the parts needed
so its the parts and assembly that have costs

if the parts and costs were all american the iphone price would increase by alot more

lets make this simple
lets say an iphone retails at $999 and lets say they make 1 billion phones.. thats $1trillion

now lets go extreme.
lets say they have 20 designers and each paid $10million each
that is $200m

now out of the $1trill, $200m is just 0.02%.. meaning of the price tag per iphone its $0.02 per iphone

yet the battery, is alot more than $0.02 per iphone
so the parts are more important part of the cost equation than the cost of the designers

I understand what you want to say but my focus here is also on other things. I think that in the end, the USA can manufacture so good smartphone with such a good price tag that it will be cheaper than the ones made in China

if you consider the labour cost of minimum wage is like a US6.5:1CNY rate meaning every activity needing labour in the US is 6.5x that of china. the parts if made fully from US raw material will be 6.5x chinese raw material, if you look at the fabricating of chips us 6.5x more then china
so going from raw material to finished retail ready phone all america would be alot more than chinese.

but sadly the USA doesn't force companies to do that and this approach of capitalism bring no good to the country to my mind. If the USA produces smartphones locally, they'll create a new job for local citizens,

smart companies do the best of both worlds.. they do and will do most the manufacturing in cheap countries. and send the PARTS to the US to automated assembly machines in the US to then be classed as made in america to then distribute from US assembly bay in the US to US merchants to sell to US customers to get US sales tax, no tariffs, and no sales tax going to china, and all done without making the whole production 6.5x

the quality of the product will be superb instead of cheap (that's what everyone expects), which means that your smartphone will last for 10 years instead of 3-4 years. Over time, manufacturing process will advance enough to create a good working conditions and also keep the local workers skilled for the job, it's a win to my mind. Today, China produces almost everything and is that really good?

phones dont die much due to quality, but built in expiry of features, causing people to need to upgrade phone just to stay upto-date with latest OS that is required for the latest apps.   yes iphones are easy to drop and crack. but thats more about physics of stiff THIN objects that dont bounce. secret is.. dont drop it

Won't the US pay for moving manufacturing into China? I think that they'll pay for this mistake and it will cost more than what they saved. It's just my opinion, correct me if you think I'm wrong.

you mean from china. as most of iphones are not using US parts so far..

forgive me if im wrong but current scenario for the last decade+ is parts are asian and always have been.. are you suggesting raw material->parts and all assembly have been US based all along (from raw material  retail ready phone).. or was it a grammatical error on your part

anyway. moving things TO USA wont cost as much as you think, nor take as long as you may think
in most cases many freeports already have empty warehouse space pre-build ready to lease, whereby all a company needs to do is move the final assembly machines of final phase production, which can reach the US within a month, thus be operational within a few months in the new business model as oppose to building a whole raw->retail production base which would take years and come with huge costs

[takuma sato]

If you move the parts and manufacture them in the US, then the cost will go up so much that the result will be:

1) Locals will have to pay more in order to keep up with the increased costs of not using chinese slave labor/any other country where it's incredibly cheap compared to western standards

2) Some people may be willing to pay the increased price in order to support their made-in-US products, but a number of other people that probably is considerable, will end up buying chinese brands which will continue to be manufactured in China like Xiaomi, Redmi, Oppo... they are already competing with western brands

And so the end result may be that you end up helping China to increase their sales. For this to work, the retail price must not increase, or not increase considerably to the point this plan backfires. I hope it works since I don't like made-in-China stuff being everywhere, but im just realistic and for now, until AI can replace slave labor, it's hard to compete with non-democratic countries.

[pooya87]

They are not selling as much, because other nations aren't as rich as USA, and USA keeps buying, because they are richer than others. That is a simple mathematics, and if one day USA can't afford to keep buying from others, they just won't, and deficit would fall, but until they can't, they are going to keep spending their money.

That is what sets USA apart. When for example your country prints your local currency, that fiat is only used by your people inside your country. When the US government prints the dollar, that dollar is used globally and also they force or scam many countries to buy their debt when the printed it. So they can create money out of thin air and then purchase stuff from others therefore exporting their inflation.

This is why the world dedollarized the first time back in 1970s but failed because they introduced a bigger and more serious scam named Petrodollar and this is exactly why over the past years the world has been on a dedollarization path.

[Agbe]

To me it's not strange because from the time trump was busy campaigning about placing some countries on tariffs on imported goods I know it was going to have some negative effects on the Americans economy because these countries too will respond because already there are information about Canada,Mexico and China also imposing tariffs on goods exported to the United States of America, so this tariffs that the trump administration is imposing on some countries is an ill thought plan that will negatively affect America especially when it comes to the economy

[Minor Miner]

In just two months, the US trade deficit has increased by more than $300 billion, and not only that, Trump's trade war has caused consumer sentiment to collapse. And according to a recent poll, his supporters in the election are optimistic that the US economy will improve under Trump.  They are becoming skeptical and even disapproving of his trade war ideas.


https://x.com/KobeissiLetter/status/1905631072328560938


https://thehill.com/homenews/administration/5223398-trump-tariffs-trade-wars-economy-canada-mexico-china/



According to previous news, today (April 2), Trump will announce a series of new tariffs on all goods imported into the United States. Let's wait and see what happens and how other countries will react.

[shield132]

Real domestic production is very important for all countries to survive and have a healthy economy. Unfortunately with China flooding the international markets with cheap goods, the production in all countries have been affected because local production cannot compete; some more than others. This is where tariffs come in and can sometimes actually help.

We face the same challenges too, maybe not as bad as most countries but still challenging. In fact we entered a new year 3 days ago and this year was named "Investment in Production" and the general policy is to push the government in the direction of helping such domestic investments so that local production can grow and become "healthier". And that's very important, because people aren't just going to get off their fannies and start producing! Governments have to intervene and get things going.

But the difference is that our fiat exchange rate is low, cost of living is also low in comparison and minimum wage is unreasonably low which means stuff produced domestically are going to end up being cheap anyway. But it is not true in the USA because dollar is very expensive and the government is not lowering it and the cost of living over there is extremely high with wages also being high the production will be expensive even with tariffs!

Competition is definitely the problem in every country but I'll explain you what happens in my country. Turkey is a huge competitor of us in our own market, we import food from Turkey but export our food in Russia and Europe, we either sell low quality agricultural products in Russia or sell organic products in EU.

The problem is that we buy cheap, low quality products from Turkey, which is not as healthy as our well-farmed products. We have always been producing high quality agricultural products. My lecturers were mostly in the government. I asked one of my lecturer about why we buy low quality turkish fruits and vegetables instead of producing our high quality products ourselves for our people. His answer was that Turkey is cheap, we save money by buying them and on top of that, we make more money by selling organic products in Europe. This was his answer and that saddened me. Btw no offence to Turkey or any other country, I know you have very good products, I only am sad that we import the worst quality of products and kill local agriculture.

Btw another problem that I noticed is that local businessmen want to become rich overnight. We have a mentality of buying a locally produced products but local businessmen set such a high prices that it's impossible for average family to buy them, that's why local businesses fail, they want to become rich overnight. Apartments here are more expensive in many other wealthy and rich countries but the apartment owner will wait for months and loss all the profit but won't lower the price of rental.

[WillyAp]

New from the tariff front.
Vietnam turned to Russia, due to tariffs, discontinuidad aid programs 
It looks as if the US Administration doesn't care much about relations.

Source: https://www.nytimes.com/2025/10/27/world/asia/3-takeaways-from-vietnams-drift-toward-russia-and-away-from-america.html
Paywallfree: https://archive.ph/PGZWS

Source: https://www.nytimes.com/2025/10/27/world/asia/vietnam-russia-relations.html
Paywallfree:https://archive.ph/huBe3