The mercantilism enabling trade cheerleaders use bad math to befuddle those who don’t think through the information. The only math that truly matters is “what impact on net trade?”
The most recent example is the Information Technology Agreement (ITA) supposedly agreed to between the US and China.
A Politico story says…
The White House said in a fact sheet that the [ITA] deal would support up to 60,000 additional U.S. jobs, “eliminate tariffs on roughly $1 trillion in annual global sales of information and communications technology products of which more than $100 billion now come from the United States,” and “increase annual global GDP by an estimated $190 billion.”
Increase global GDP? What about US GDP. Who do they work for. Will it increase other countries’ GDP a bit and decrease ours (as in the past) a little less?
Assuming, which I do not because of past untruths, that global GDP will rise, the $190B increase is 2/1000ths of a percent (global world product is about 71 trillion USD). Where do they even get this number. It is so far within any margin of error of any possible estimate as to be statistical baloney.
They also use the common nomenclature that the deal would “support up to” 60,000 additional US jobs. They don’t say create jobs. The word “support” allows them to claim existing jobs in existing supply chains relevant to the ITA without analysis or without one new job created.
Eliminating tariffs on nearly $1 trillion in annual global sales? But not “creating” any new jobs. Then… so what.
The question is what will be the Net Trade impact for the US. They make no claim to a net trade benefit. For one of two reasons. The net trade impact will be negative. Or they don’t know. Or they don’t care.
This is an example of why our trade policy is broken. The US Trade Representative had never been directed to pursue balanced trade, but rather more two way trade regardless of balance. Net exports grow our economy. Net imports shrink our economy.
This is why they can’t be trusted.
