Why does America import more products from China than it exports to them?
A:
Fundamentally, this is an economic phenomenon: a growing city services a larger and larger area, and a shrinking city services a smaller and smaller area. When Toronto grows, more visitors from the surrounding area visit Toronto for shopping, concerts, events, etc. That’s economic function.
The same token is also true for countries. China is a growing country that serves more and more to the world in the global economy. China exports more than its imports, which means China is growing. China exports more than imports is by itself a growing phenomenon. This phenomenon should not be viewed for specific countries, such as the USA. The best measure is to compare the imports and exports of each country by itself. It is like a household manages its finances. Does it spend more than its income? If a household has income from running a cafeteria serving office employees, should all its consumption be those office services? If China has a trade surplus with the US doesn’t mean China has to buy more from the US. You cannot expect a cafeteria serving a financial district to expense all its income on financial services. A household cannot live like that. The US has its own financial and economic policy to balance its trade. Aiming at one specific country to balance its trade is meaningless.
China has a trade surplus with some countries and a trade deficit with others. But overall, China has a trade surplus. The US has a trade surplus with some countries and a trade deficit with others. But overall, the US has a trade deficit. This means that China has an economy that is expanding, and the US shrinking. Blaming the trade deficit on China misleads the public and influences the decision-making that results in wrong policies because policymaking is not based on reality and reasoning.
We witness the defeat of the trade war on China. If the US wants to bring manufacturing back to the US, tariffs on China only will not work. I know the US has many talent economics. A truly democratic society should have its voice heard and its talent used to address the US problem of decline. Yet economists have no position in the Congress. The military has.
When the US has a problem, the president asks where is their carrier fleet. The US has the strongest military power in the world and wants to address all the US problems by military operations. The US has the military hammer, and all the problems are nails. The US blames China for its trade deficit, and projects most of its military power surrounding China. This is very silly. No wonder the US continues to decline.
