I enjoyed this one a lot, because I was on set in New York with Becky and Joe–much better than being a head-in-a-box in a remote studio and, at 6AM in New York with the markets not open yet, we had time to dig into the topic.
In particular, we discussed my idea that reducing the headline number for the US/China goods trade balance is the wrong target. Trade in good (stuff on boats in containers) is increasingly dominated by fast-growing trade in services and by massive capital flows. A better target would be the current account, which includes flows of services as well as goods. Interestingly, this year China will run a small current account deficit, not a surplus, with the rest of the world. My message: both Americans and Chinese are hurt by tariffs. Trade wars are bad for both countries.
JR
