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by bkor
2919 days ago
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> From a trade perspective, a rising deficit means the US pays for Chinese goods, while barely getting paid for its products. From what I understood this is not accurate. An iPhone built from China is recorded for the full value when shipped to US/Europe/etc. This makes it appear that there's a trade deficit while it's actually the opposite (controlled by Apple). Europe works in a similar way when I looked at it (ages ago). There's various data collected (Eurostat). But for trade it's on value and it's not always clear who controls it, nor where it is headed. |
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It is true that trade deficits are calculated on full value, not the “value-added”. Even with this distinction the argument still holds. E.g. in 2014, the "value added" trade deficit was USD 200 Billion while the official “full” value was USD 315 Billion. So it’s not like a tiny fraction, but rather a significant portion. This is one of the reasons people still use the old system - it is inaccurate but not at all grossly misleading (and inveting a new “global” system is really painful). This difference of USD 200 Billion is still too large for the US to willingly accept.
Here’s a link in case you wanna check a couple of figures. https://www.bloomberg.com/view/articles/2018-03-18/big-u-s-c...