Page 27 - The South China Business Journal
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it in
cific Trade Deficit
and services and across the countries with are at risk if the administration proceeds with
which the United States trades. Whatever this plan.
these bilateral patterns, they are at once
interesting and harmless. Some other trade proposals have also
been off base. The U.S.-Korea Free Trade
A simple example demonstrates. Consider Agreement was not being implemented
three countries: A, B, and C. Each country is as intended, but it is a remarkably
running a perfect balance in trade because strong agreement and did not need to be
in each country total saving equals the total renegotiated. The North American Free
demand for saving. Yet A runs a $1 billion Trade Agreement (NAFTA) could use
trade deficit with B; B a $1 billion deficit with some modernization, but there is strong
C; and C a $1 billion deficit with A. Should A opposition across the U.S. business and
complain to B about its trade deficit? Then agriculture community to a number of
how should A respond to C with which it is the administration’s central goals in
running a trade surplus? renegotiating NAFTA.
Citing the trade deficit, President Trump President Trump is not a traditional president,
has taken actions, and suggested more, so he takes a somewhat different approach
to address various issues he sees in our to the traditional diplomatic give and take.
trading relations. In principle, he is right Trump’s approach is more akin to a two-by-four
to challenge China’s behavior with respect – as in, “How do you get a mule’s attention?”
to excess capacity in some industries, with
market access, and with intellectual property He’s gotten the world’s attention. It’s
protections. time now, as NASA would say, to “work the
problem” of improving the international
However, the proposed remedy – imposing trade regime, not with an eye to correcting
tariffs on up to $150 billion of imports from bilateral trade deficits or even overall trade
China – would be an economic calamity. deficits, but with the goal of strengthening
As U.S. Chamber President and CEO the international trade regime for America’s
Tom Donohue has said, tariffs could lead consumers and businesses.
to a destructive trade war with serious
consequences for U.S. economic growth and With all due respect to Beyoncé and Iowa,
job creation. The livelihood of America’s we don’t really want her doing physics and we
consumers, businesses, farmers, and ranchers don’t really want Iowa crab cakes.■
South China Business Journal 25
cific Trade Deficit
and services and across the countries with are at risk if the administration proceeds with
which the United States trades. Whatever this plan.
these bilateral patterns, they are at once
interesting and harmless. Some other trade proposals have also
been off base. The U.S.-Korea Free Trade
A simple example demonstrates. Consider Agreement was not being implemented
three countries: A, B, and C. Each country is as intended, but it is a remarkably
running a perfect balance in trade because strong agreement and did not need to be
in each country total saving equals the total renegotiated. The North American Free
demand for saving. Yet A runs a $1 billion Trade Agreement (NAFTA) could use
trade deficit with B; B a $1 billion deficit with some modernization, but there is strong
C; and C a $1 billion deficit with A. Should A opposition across the U.S. business and
complain to B about its trade deficit? Then agriculture community to a number of
how should A respond to C with which it is the administration’s central goals in
running a trade surplus? renegotiating NAFTA.
Citing the trade deficit, President Trump President Trump is not a traditional president,
has taken actions, and suggested more, so he takes a somewhat different approach
to address various issues he sees in our to the traditional diplomatic give and take.
trading relations. In principle, he is right Trump’s approach is more akin to a two-by-four
to challenge China’s behavior with respect – as in, “How do you get a mule’s attention?”
to excess capacity in some industries, with
market access, and with intellectual property He’s gotten the world’s attention. It’s
protections. time now, as NASA would say, to “work the
problem” of improving the international
However, the proposed remedy – imposing trade regime, not with an eye to correcting
tariffs on up to $150 billion of imports from bilateral trade deficits or even overall trade
China – would be an economic calamity. deficits, but with the goal of strengthening
As U.S. Chamber President and CEO the international trade regime for America’s
Tom Donohue has said, tariffs could lead consumers and businesses.
to a destructive trade war with serious
consequences for U.S. economic growth and With all due respect to Beyoncé and Iowa,
job creation. The livelihood of America’s we don’t really want her doing physics and we
consumers, businesses, farmers, and ranchers don’t really want Iowa crab cakes.■
South China Business Journal 25
