Monetary Matters with Jack Farley Trade Policy Isn't Driving China’s Trade Surplus | Matthew Klein
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Jun 11, 2025 
Matthew Klein, founder of The Overshoot and expert in global macro analysis, joins the discussion to unravel the complexities of international trade. He argues that factors like income inequality and corporate decisions overshadow country-level trade policies in driving trade surpluses. Klein highlights that China's internal economic disparities are as impactful as external trade relations. He warns against simplistic solutions to trade imbalances, emphasizing their potential to exacerbate existing issues.
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Trade Wars Are Internal Conflicts
- Trade wars are conflicts between elites within countries, not between countries themselves.
- Domestic income inequality and internal political economy drive global trade imbalances.
Macro Policies Drive Imbalances
- Macro domestic economic policies significantly drive trade imbalances more than trade tariffs.
- Europe's crisis showed internal policy shifts caused spillover effects, hurting other countries.
Good vs. Bad Trade Imbalances
- Good trade imbalances support countries with growth potential financing development.
- Persistent US deficits reflect push factors in global finance, not purely consumption habits.
