Trade is a zero-sum exchange, and always will be in terms of dollars. When one factors in the benefit of much cheaper goods without the resource depletion and pollution of manufacturing the benefit shifts to the receiver of those goods. The upper limit of the cost-benefit of imported goods will always be the real cost of manufacturing them here before it becomes cost-effective to do so.
We are so far away from the break-even point that Trump could slap China with a 200% tariff and the only reduction in trade with them would come from the inability of Americans to pay the higher prices, which would also mean they certainly couldn’t pay the price needed to manufacture goods here either. We could use tariffs to make other suppliers more competitive, but Trump doesn’t even appear interested in using that leverage. China has though, as the increased bankruptcies in our agriculture sector are proving.
The problem with being a net importer comes from the no-win war capital has waged against domestic labor and the view of imports as a weapon in that war. The American economy revolves around jobs and the fact that the middle class is quite willing to be wage slaves to capital when the money needed to buy the imports is a no-cost commodity in endless supply to Congress keeps us locked into that dynamic. China is likely deciding to disengage from their dependence on our market simply because of the level of stupid Trump represents.
As long as goods are available to purchase there is no need to worry about who is producing them. The primary job of Americans in this economy should be “CONSUMER”, which means they need some access to currency not dependent upon production. Productive jobs are good for a variety of social reasons, but they aren’t required to produce the goods being imported, and shouldn’t be limited to their utility in producing profits.
Congress should accept its Constitutional mandate to create the currency “for the common welfare” and fully fund a federal job guarantee program administered at the state and local level. Such a program would be countercyclical to the business cycle, replacing many of the current safety nets and setting a bottom for wages and benefits for private employment. This would peg the economy to labor and end the use of monetary policy/involuntary unemployment as a control on our economy, which has proven all but failed with a fiat currency anyway.
