Disentangling a Worsening Trade Deficit: Sector-Specific Industrial and Macro Economic Policy

The U.S. trade deficit rose 9.6% in January, 2017, to the highest level since 2012. The gap of $48.5 billion of exports exceeding imports looks daunting, yet the story is more complex at the sector level.[1] According to Neil Irwin of The New York Times, “What really matters is not whether the trade deficit is rising or falling. What matters is why?”[2] Distinguishing macro factors such as a strengthening dollar from sectoral strengths and weaknesses is thus necessary.

The full essay is at "Disentangling a Worsening Trade Deficit."

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1. Neil Irwin, “The Huge January Trade Deficit Shows Trump’s Hard Job Ahead,” The New York Times, March 7, 2017.

2. Ibid.

The Port of Oakland (Source: Jim Wilson/NYT)

Bringing Back Manufacturing Jobs to the U.S.A.: Confronting Tough Realities

Meeting with American corporate CEOs at the White House on the first “working day” of his presidency, Donald Trump warned, “A company that wants to fire all of its people in the United States and build some factory somewhere else, then thinks that product is going to just flow across the border into the United States . . . that’s just not going to happen.”[1] The new president was up against “tectonic forces” in trying to bring back “blue collar” manufacturing jobs to his base using tax policy. Yet the business calculus goes immediately on the basis of financial advantage, and the contours of the “game board” include the various tax and trade policies of countries.

The full essay is at "Bringing Back the Jobs."

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[1] Nelson D. Schwartz and Alan Rappeport, “Call to Create Jobs, or Else, Tests Trump’s Sway,” The New York Times, January 24, 2017.