Growing trade deficit is selling the nation out from under us (2003) [pdf]

Age of the article & view of Buffett’s argument

• Many note the piece is from 2003 but still feel the trade-deficit problem has worsened or at least persisted.
• Others argue events since then show Buffett was wrong: deficits and net foreign ownership grew without clear macro collapse.
• Some see his “selling the farm” analogy as too zero‑sum, ignoring that new firms and value can outgrow foreign equity stakes.
• There’s criticism that he benefited from offshoring via his investments, then later warned about its consequences.

What is a “trade deficit”? Goods vs services

• Several point out headline deficits usually count only goods, ignoring large US surpluses in services (finance, software, cloud, media, IP).
• Tourism and other cross‑border services are hard to measure; card networks could be proxies but aren’t fully used.
• Digital products and SaaS blur the line between goods and services; much software “export” disappears into services accounting.
• Example: iPhones assembled in China count mostly as Chinese exports even though design, IP and many components are non‑Chinese; transfer pricing further distorts who “exports” what.

Tariffs vs Import Certificates (ICs)

• Buffett’s IC proposal is seen as a cap‑and‑trade system on imports: exporters earn certificates that importers must buy, enforcing overall balance while allowing bilateral imbalances.
• This is contrasted with current across‑the-board tariffs targeted country‑by‑country, which don’t reward exporters and can be arbitrary (e.g., apparel hit, semiconductors initially spared).
• Some find Trump’s plan superficially similar in goal (reduce deficit) but cruder in mechanism and more politicized.

Deficits, reserve currency, and “selling the nation”

• One camp: as issuer of the reserve currency, the US can swap “imaginary” dollars for real goods and would be foolish not to run deficits (Triffin dilemma).
• Others worry large foreign holdings of US assets (bonds, real estate, equity) erode sovereignty over time, especially if foreign owners’ interests diverge from US workers’.
• Some argue foreign investors become quasi‑“partners” in US prosperity; dilution only matters if asset creation and growth lag.

Historical analogies and imperial dynamics

• Comparisons to Britain–India are debated: critics say that was plunder under colonial rule, not analogous to today’s voluntary trade.
• Others argue the US exerts softer economic control via dollar‑denominated debt, IMF/World Bank structures, and military ties, creating “super‑imperialism.”
• Counterpoint: many poorer manufacturing countries are now more dependent on China than on the US, and can redirect exports if US tariffs rise.

Reshoring, living standards, and class conflict

• Strong skepticism that the US can broadly reshore manufacturing without lowering living standards, especially for consumers used to cheap imports.
• Some suggest redefining “standard of living” away from consumer excess toward essentials and public goods; critics say US politics won’t accept that and would label it “communism.”
• Several emphasize the bigger story is domestic class war: far more wealth was shifted from US labor to domestic elites than to foreign workers.
• Concern that protectionism without redistribution will raise prices, deepen inequality, and risk stagflation while not rebuilding a full industrial base.

Manufacturing economies & global specialization

• Commenters note export powerhouses like Germany and Japan don’t look especially dynamic or rich at the median; manufacturing jobs there often don’t buy a house.
• European voices stress that national trade deficits are being misused politically; efficient global specialization requires some countries to run deficits and others surpluses.
• Critics reply that this ignores CO₂ costs, labor standards, and strategic vulnerabilities when key supply chains are offshore.