US trade deficit as an American problem

Imad Moosa

Chapter 8 in Research Handbook on Trade Wars, 2022, pp 151-173 from Edward Elgar Publishing

Abstract: Four propositions are presented on the US-China trade war or dispute. The first proposition is that while the US claims that the yuan is grossly undervalued, it may or may not be so because measuring exchange rate misalignment is not exactly science. The second proposition is that even if the yuan were undervalued, revaluation is unlikely to eliminate or reduce the US bilateral deficit with China. The third proposition is that the rationale on which Trump initiated his trade war is flawed. The fourth proposition is that the trade war against China is an integral component of a geopolitical war against a rising power, which means that it can be explained in terms of the Thucydides trap. It is concluded that a trade war with China is senseless and that the way forward is to allow China to take its rightful place in a changing world economy.

Keywords: Asian Studies; Economics and Finance; Geography; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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