Trading With China: Resetting the Balance

By Ronald J. Rychlak:

When I studied economics in college, the answer to trade imbalance was that eventually, the dollars sent overseas have to be spent back in the United States. So, the argument went, there was nothing to worry about. Given their penchant for saving, however, Chinese investors “spent” their dollars by buying U.S. real estate and equity in American corporations. That wasn’t in the plan, and it certainly created some concern.

Moreover, the promised freedom in China didn’t develop. Many Western intellectuals and their Chinese counterparts have noted that China today is less free than it was a decade ago. Free speech, dissent, and religion have all been suppressed by the regime. In fact, the Chinese regime recently launched perhaps its strongest censorship campaign ever, right around the 30th anniversary of the Tiananmen Square massacre.

So what is the relevancy of this today? In 2018, the Trump administration began negotiating with China to re-work structural issues and re-balance the U.S.–China trade relationship. According to the president, China has been able to “rip off the United States” to the tune of $500 billion a year. Just recently he repeated his threat that if China is unwilling to make progress in these negotiations, he’ll continue to impose tariffs on billions of dollars of Chinese goods.

Read more: Epoch Times