Introduction
Providing images (and videos) can raise provocative questions that words cannot.
In this newsletter, I present an image that should prompt questions about the trade balance and the mathematical basis for determining U.S. trade policy.
Trade Balance
The following image shows the trade balance between the U.S. and China in 2001 and 2003. (I was unable to find a similar image showing 2004. Since I only want to pose a question, this image will suffice.)
Trade balances seem to have changed dramatically in a short period. This change occurred during a period that included tariff increases after 2016 and before those imposed in 2025.
I pose a few questions to get your thinking started:
- Does this change help or hinder the U.S. economy?
- How will the tariff regime of 2025 affect this balance?
- Can the U.S. ever reset this balance if it wishes?
- And more…?
Math Quiz
Does this video contain a mathematical error?
Does this give you confidence in calculations made to establish trade policy?
Conclusion
Consider the possibility that the U.S. has isolated itself (to its own detriment) from the rest of the world. Can the U.S. regain its dominance?
Populations 2024
- China: 1,408,975
- India: 1,450,935
- U.S.: 340,110
Ask your resident math genius if you calculate productivity using some measure other than U.S. Dollars, how much would the U.S. have to increase productivity to keep up with the rising productivity of just these two countries?
My final question: What price will we pay for implementing isolationist trade policies?