United States–China Trade: President Trump's Misunderstandings

Ralph Huenemann

Asia and the Pacific Policy Studies, 2018, vol. 5, issue 1, 150-154

Abstract: President Trump's analysis of the persistent United States–China trade imbalance reveals fundamental misunderstandings of basic economics. During the 2016 campaign, candidate Trump made an important Big Promise with two facets: to bring back American jobs from other countries (especially China) and to eliminate the American trade deficit. But, as pointed out by Barack Obama in his farewell address, many of the American jobs were lost to factory automation, not to imports. Furthermore, if China's central bank had pursued a less interventionist foreign exchange rate policy, most of the labor†intensive imports from China would have been produced in other low†wage countries, not in domestic factories. Finally, and most importantly, the persistent American foreign trade deficits (with many countries, not just with China) arise from the domestic imbalance between taxes and government expenditures. Unless this budget imbalance is dealt with, the foreign trade imbalance will necessarily continue.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/app5.206

Related works:
Working Paper: United States–China Trade: President Trump's Misunderstandings (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:asiaps:v:5:y:2018:i:1:p:150-154

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=2050-2680

Access Statistics for this article

More articles in Asia and the Pacific Policy Studies from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().