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Trump's border comments show that he does not understand how trade works



During a brief press conference he held in Mar-a-Lago on Friday afternoon, President Donald Trump said the closure of the border with Mexico would be a "profit operation" due to the trade deficit of the United States with its southern country

"I will close the border and with a deficit we have with Mexico and I have had many years, the closure of the border will be a profit," Trump said after announcing his departure. of Small Business Administrator Linda McMahon, which is the main purpose of the press conference.

This is not how the trade works! pic.

As Dora Lind of Vox explained in an article about the threats that Trump made on Twitter earlier on Friday to close the border "[i] f, Mexico does not immediately stop ALL immigration to enter the US through our southern border "the border would violate supply chains and import / export flows, causing an economic catastrophe:

Excluding ports of entry would be an economic disaster. This would also disturb the lives of border communities relying on the flow of people between the US and Mexico – including the big cities of San Diego (and Tijuana) and El Paso (and Ciudad Juarez).

Approximately billions of euros for trade is happening along the US-Mexican border every day. Almost half a million people cross the border legally every day through the very port of Texas.

Even reducing port capacity or temporary disruptions usually lead to panic among the business community and locals. El Paso is currently affected that longer waiting times in ports can be prolonged as agents are redirected to the care of unauthorized migrants. When San Ysidro's arrival in San Diego closed for several hours in November, as agents reacted with force (including tear gas) to an organized march of asylum seekers, the temporary closure cost about $ 5.3 million in lost business revenue.

According to the US Trade Representative Office, Mexico is the third largest trading partner in the US, with total trade in goods and services amounting to more than 615 billion dollars in 2017. While the total US deficit with Mexico this year was $ 63.6 billion, with approximately 1.2 million US jobs being based on US-Mexico trade.

Even short border closures have significant negative consequences. When San Isidro's arrival in San Diego was closed for five o'clock last November, after an unfortunate march on the Mexican side, the San Isidro Chamber of Commerce estimated that US companies would cost about $ 5.3 million.

Trump can believe American jobs are better protected by protectionist trade policies – trade protectionism is one of Trump's signing issues – but he has a long history or a misunderstanding of how these policies really have an impact on the American economy or wildly bad claims of trade deficits. He has repeatedly circulated inaccurate data on US deficits and demonstrates ignorance of the fact that deficits are calculated on the basis of goods and services and not just goods.

Trump has attempted to reduce deficits by imposing a customs duty on imported goods, but he does not seem to understand that the tariffs are really taxes on US importers and not on foreign governments. And recent data show that not only Trump's trade wars do not reduce deficits but actually do the opposite: the US trade deficit of $ 891.3 billion in 2018 is the highest in history


The news is moving fast. To be updated, follow Aaron Rupar on Twitter and read more about Vox politics and politics .


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